Scuffles erupted on Saturday night in Zibdine after Hizb Allah supporters accused members of the Amal movement of trying to disturb a celebration they were holding there, both Amal-aligned mayor Anis Kubaisi and a Hizb Allah spokesman said.
Tensions escalated into armed clashes on Sunday morning. Residents of nearby villages said automatic weapon fire could be heard echoing for miles around.
Heavy fighting eased by early afternoon after Lebanese security forces entered Zibdine, which sits atop a hill 80km south of the capital Beirut, witnesses and security sources said.
A Lebanese security source told Aljazeera that one person, Husayn Fuani, was injured in the clashes.
Hizb Allah and Amal officials, who had asked Lebanese security forces to intervene, were due to meet in the south later to discuss the incident, a Hizb Allah spokesman said.
Clashes have occasionally erupted between Hizb Allah and Amal followers over where to hang party flags or pictures of their leaders, sometimes resulting in deaths, but Sunday's confrontation was the heaviest clash in years.