BEIRUT, LEBANON - The U.S.-backed Cabinet on Wednesday reversed measures against the militant Hezbollah movement that set off Lebanon's worst violence since the 1975-90 civil war.

The decision was a major victory for the Iranian-allied Hezbollah and the latest sign that the Shiite militant group appeared to have gained the upper hand in the country's political power struggle after its fighters routed supporters of the government.

Seconds after the announcement, celebratory gunfire erupted south of Beirut, in a Hezbollah stronghold, but there was no immediate response from the movement's leaders.

Clashes between government supporters and opponents broke out last week after the Cabinet challenged Hezbollah with decisions to sack the airport security chief for alleged ties to the group and to declare the militants' private telephone network illegal.

Hezbollah leader Hassan Nasrallah said that amounted to a declaration of war and sent his fighters to the streets for the first time since the civil war ended.

Fierce street battles, many of them along sectarian lines, erupted, and Hezbollah and its Shiite allies seized much of Muslim west Beirut by force. At least 54 people were killed.

Information Minister Ghazi Aridi said the government made a "courageous" decision to revoke the measures "in view of the higher national interest."

Aridi said the government hoped the decision would "pave the way for a new stage" in which the country would "manage to put sectarian strife behind us and concentrate on Lebanese national unity."

He said the government hoped for a settlement in the crisis with the Hezbollah-led opposition that has paralyzed Lebanon for 18 months.

The opposition quit the Cabinet in November, demanding more power and a veto over all government decisions. The deadlock has prevented parliament from electing a new president, leaving the country without a head of state for six months.