The Lebanese army's chief of operations, Gen Francois al-Hajj, has been killed in a car bomb attack.
Two other people died in the blast in the Christian town of Baabda, close to the presidential palace in Beirut.
Gen Hajj had been tipped to become army chief if Gen Michel Suleiman becomes president in an effort to resolve a lengthy political crisis.
Parliament has failed to elect a president and the opposition refuses to recognise the elected government.
While the pro-West ruling bloc and pro-Syrian opposition, led by Hezbollah, agree Gen Suleiman should succeed former President Emile Lahoud to break a political impasse, the factions cannot agree on the formation of a new government.
Gen Hajj was chief of operations when Lebanon's army fought Islamic militants from Fatah al-Islam in Nahr al-Bared refugee camp earlier this year.
About 400 people, mainly militants and soldiers, died in the violence, and some 40,000 people were displaced.
Security officials said Gen Hajj had left his home by car, probably en route to the nearby ministry of defence, just minutes before the blast.
It is believed that both he and his bodyguard were killed instantly.
The large explosion, which occurred at 0710 (0510GMT), left the area littered with the wreckage of burned-out vehicles, the BBC's Jim Muir reports from the scene.
The army command issued a statement blaming "the criminal hand" for the attack.
It said the army had sealed off the area and had begun an investigation.
Some pro-Western politicians blamed Syria, which has been implicated in some attacks against anti-Syrian Lebanese politicians in recent years. Syria has denied involvement.
Lebanese telecommunications minister Marwan Hamadeh accused the "Syrian-Iranian axis" of attacking the military, "the only body in Lebanon who can balance the power of Hezbollah and other militias in the country".
However, Hezbollah , which is backed by Syria, and its Christian ally Michel Aoun, both denounced the attack.
Mr Aoun said he had supported Gen Hajj to succeed Gen Suleiman as army commander.
Gen Hajj had been tipped to become head of the army
Syrian Foreign Minister Walid al-Moualem condemned what he described as a "criminal attack", Reuters news agency reported.
"We condemn any action that threatens Lebanon," he said.
An unnamed Syrian official quoted by the state news agency, Sana, said "Israel and its agents in Lebanon" were the beneficiaries of what it described as a crime against "a Lebanese patriot who believed in the army, defended the resistance and worked for a united Lebanon".
The US said it "strongly condemned" the attack.
President George W Bush would "continue to stand with the Lebanese people as they counter those who attempt to undermine their security and freedom", a spokesman for the US government's National Security Council said.
The suspected bombing took place in a high security area, which is home not only to the presidential palace, but to the ministry of defence, several embassies and homes of senior politicians.
The fact that someone was able to kill such a high level army commander in an area like that suggests that they are very organised, very capable and utilising lots of intelligence, our correspondent says.
Feb 2005: Ex-PM Rafik Hariri
April 2005: MP Bassel Fleihan
June 2005: Anti-Syria journalist Samir Kassir
June 2005: Ex-Communist leader George Hawi
Dec 2005: Anti-Syria MP Gebran Tueni
Nov 2006: Industry Minister Pierre Gemayel
June 2007: Anti-Syria MP Walid Eido
Sep 2007: Anti-Syria MP Antoine Ghanim
Dec 2007: Army Gen Francois al-Hajj
He says it is questionable whether the Fatah al-Islam militants would have the means to carry out such a precisely targeted attack.
There have been a number of high profile political assassinations in Lebanon in the last two years, the majority of them anti-Syrian campaigners.
Gen Hajj's political allegiances are not known. Senior military officials have not been previously targeted and analysts say the military is seen as a unifying power in the politically fragmented country.
With Lebanon in the grips of the worst political crisis since the country's long civil war ended in 1990, our correspondent says this is exactly the kind of tension-raising incident which it is feared could trigger much wider unrest.
The pro-Syrian Mr Lahoud left office on 24 November and legislators have repeatedly failed to elect a new president.
On Monday members of parliament postponed their vote to elect a successor for an eighth time.
They are divided on the make-up of the new government.
There is also said to be a dispute over how to amend the constitution to allow a senior civil servant to be elected.
Under Article 49 of the current constitution, senior civil servants like Gen Suleiman are barred from becoming president within two years of stepping down.