WASHINGTON, Aug 13 (Reuters) - The United States said on Monday it had designated al Qaeda-inspired Fatah al-Islam, a militant group active in Lebanon, as a "terrorist" organization, subjecting it to U.S. financial sanctions.

Over the last 12 weeks, Fatah al-Islam has been fighting the Lebanese army at the Nahr al-Bared Palestinian refugee camp in North Lebanon in clashes that have killed at least 278 people and displaced some 40,000 refugees.

The group, which split from a Syrian-backed Palestinian faction last year, has Lebanese, Palestinians and other Arabs in its ranks, including some who have fought in Iraq. It says it supports al Qaeda's ideas but has no direct links.

The conflict, Lebanon's worst internal violence since its 1975-1990 civil war, has further undermined stability in the country, which has been crippled by a prolonged political crisis and shaken by bombings that have killed six U.N. peacekeepers and two anti-Syrian lawmakers in recent months.

The Lebanese government links Fatah al-Islam to Syrian intelligence, which has denied accusations of continued interference in Lebanese affairs since it withdrew its forces from Lebanon in 2005 after a 29-year military presence.

Syria and the group itself deny any links to each other.

The State Department said the Secretary of State named Fatah al-Islam "as a Specially Designated Global Terrorist," a status that cuts the group off from the U.S. financial system.

"As a result ... all property, and interests in property which Fatah al-Islam has in the U.S., or which enters the U.S. or comes under the control of U.S. persons, are blocked," the State Department said in a statement.

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