Libya said tonight that Egyptian planes were continuing to bomb military and civilian targets in the towns and oases of eastern Libya, and threatened to "retaliate violently into the heart of Egypt."
An Egyptian military spokesman, in a statement broadcast by Cairo radio, dismissed the Libyan charges as "lies."
The charges and denials continued late tonight, after it was reported without confirmation that Palestine Liberation Organization leader Yasser Arafat had obtained an agreement in principle to a cease-fire to end the battles that have brought the North African Arab neighbors to the brink of all-out war and stirred criticism and concern throughout the Arab world.
The latest clash began Thursday when the Egyptians, in what they said was retaliation for a Lyiban attack, crossed the border near the Mediteranean Sea. A communique said 40 Libyan tanks were destroyed, two Libyan planes shot down and a number of prisoners taken. Yesterday, Egypt said its jets had attacked the Libyan air base at Adem, near Tobruk in northeastern Libya, in response to three Libuan air raids in Egypt.
The fact that newspaper editorials and radio commentaries in several Arab countries criticized Egypt and Libya for fighting each other instead of the common Arab enemy, Israel, was one of the few certainties on a confusing day of conflicting and unsubstantiated reports.
TSince no independent observers have been able to get within miles of the long desert frontier, the conflict has become a war of communiques between Cairo and Tripoli.
Western military analysts admitted that they had only scanty information about what was really happening, and were divided in their opinions about how long the conflict would continue. Egyptian officials said little beyond the official communiques, which dismissed Libyan accounts of extensive air raids as "sheer imagination."
Most Egyptians, including government workers, were taking a long holiday weekend to mark the 25th anniversary of the revolution that overthrew the Egyptian monarchy.
Ironically, the day is also observed as a holiday in Libya, a reminder of the early years of the government of Col. Muammar Qaddafi when Libya sought to ally itself with Egypt, and joined with Egypt and Syria to form the Federation of Arab Republics. The federation still exists on paper, but is long dormant, the victim of steadily deteriorating relations between Qaddafi and Egyptian President Anwar Sadat.
There was no air of crisis in the Egyptian capital. The fighting, if there is any, is 300 miles away, along a desolated desert border that most Egyptians never see anyway.
Civilain air service between Egypt and Libya was suspended, disrupting travel all across North Africa, but there were no reports of harassment of the estimated 200,000 Egyptian workers in Libya or Libyan nationals living here, as there have been during periods of tension in the past.
A sign posted in the Cairo office of Libyan Arab Airlines reminded Egyptian teachers to come in on Aug. to pick up their tickets for their return to Libya. It is not known whether the teachers, who are the backbone of the Libyan school system, will be permitted to go.
After Sadat's speech last night in which he said Egyptian armed forces had taught Qaddafi "a lesson he will not forget," most observers believed there would be a lull in the fighting while mediation efforts continued.
The border area was reported quiet this morning, but the Libyan reports of renewed Egyptian air strikes began coming in shortly afterward.
Tonight, Libya reported that the Egyptians were carrying out "massive air attacks on vital civilian targets" at Toburk and all along the border. A broadcast monitored in Cairo said that "if this aggression is not stopped, the Jamahariyah (the Arabic name Libya has coined for itself) will retaliate violently into the heart of Egypt."
The Libyans said they had downed five Egyptian planes, including two Mig 21s. This , too, the Egyptians denied.
Libya is not believed capable of making military strikes into the interior of Egypt, even with the arsenal of sophisticated weapons that Qaddafi has bought from the Soviet Union in the last three years.
The Libyans are capable of stirring up trouble in Egyptian population centers through terrorism, as the Egyptians have accused them of doing. The Egyptians have blamed Libya for an explosion on a crowded train last summer, bombings of public buildings and the hijacking of an Egyptian domestic airliner, and have charged Libya with supporting extremist groups that oppose the Sadat government.
The story of Egyptian-Libyan relations since the 1973 Middle East war - in the planning of which Sadat ignored Qaddafi - is one of steady deterioration marked by occasional fruitless attempts at reconciliation.