Lebanon's government cancelled measures on Wednesday that angered the Iranian-backed Hezbollah movement and triggered the worst internal conflict since the country's 1975-90 civil war.

The U.S.-backed government of Prime Minister Fouad Siniora said in a statement after a meeting that it was taking the step in line with a request by the Lebanese army to preserve civil peace and promote an Arab League mediation effort to end Lebanon's 18-month-old political crisis.

"The cabinet decided to agree on the suggestion of the army commander ... which includes the cancellation of the two decisions," the statement, read by Information Minister Ghazi al-Aridi, said.

A senior opposition source welcomed the move. "We welcome the government's step and we see that it forms the prelude to end our disobedience campaign," he told Reuters.

The source said the opposition would end the disobedience campaign once the ruling coalition agrees to talks. He said such an announcement was expected on Thursday.

Shortly after Aridi read the statement, Hezbollah supporters fired into the air in Beirut to celebrate what the group sees as a major blow to the government and its allies.

Rescinding the ban on Hezbollah's communications network and the sacking of Beirut airport's security chief, who is close to the group, were two of Hezbollah's demands to lift its campaign of civil disobedience, including barricades on the airport road.

It is also a first step towards easing the broader standoff between Siniora's government and opposition forces that has left Lebanon without a president since November.

At least 81 people have been killed since violence broke out on May 7 following the cabinet decisions against Hezbollah, which routed its rivals in six days of fighting and briefly seized control of parts of Beirut.

U.S. BACKING

U.S. President George W. Bush, in Jerusalem to celebrate the anniversary of Israel's founding in 1948, accused Iran on Wednesday of using the Islamist Shi'ite Hezbollah to destabilise Lebanon. He said: "This is an Iranian effort to destabilise their young democracy."

He said the United States stood by Lebanon, a parliamentary democracy since independence from France in 1943.

The U.S. State Department said on Wednesday Washington plans to speed up assistance to the Lebanese army and reported consultations were ongoing with U.N. Security Council members over how to tackle the crisis.

"At this point, it is not entirely clear what kind of action might come out of those discussions but certainly it is important for the Council to be able to speak strongly on this issue," State Department spokesman Tom Casey said in Washington.

"This is something that is of great concern to many Council members and we will be working closely to see what we can come up with," he added, without giving further details.

Iran has rejected accusations from Washington that it is meddling in Lebanon and has blamed the violence on the United States and Israel. "Iran is the only country not interfering in Lebanon," President Mahmoud Ahmadinejad said on Tuesday.

Siniora earlier met a high-level Arab League mission which is trying to mediate a solution to Lebanon's standoff.

The delegation, which includes eight Arab foreign ministers, was led by Qatari Prime Minister Sheikh Hamad bin Jassim bin Jabr al-Thani and Arab League chief Amr Moussa.

Syria, which backs the Hezbollah-led opposition, threw its weight behind the mediation effort on Wednesday. A foreign ministry statement in Damascus urged all Lebanese parties to cooperate constructively with its proposals.

If it succeeds in easing tension, the delegation is expected to invite the rival leaders to Qatar for talks aimed at resolving their protracted political conflict.

The broader political dispute revolves around how to share power in cabinet and a new parliamentary election law.

Another political source, speaking before the talks, said the pro-government leaders wanted guarantees Hezbollah would pull out of the streets and vow not to use its guns against its foes before any dialogue.

The fighting had raised concerns Lebanon was edging towards wider civil strife among Druze and Sunni supporters of the governing coalition and Shi'ites who back Hezbollah.

Saudi Arabia, a backer of the governing coalition, has said Hezbollah's actions, if backed by Iran, could threaten Tehran's ties with Arab states.