The usually well-informed An-Nahar daily said Lahoud put his foot down at the last cabinet meeting, which discussed the case of a Palestinian woman with US citizenship who wanted to buy land in southern Lebanon to build a home.
When ministers pointed out that the woman, who was not identified, had acquired US nationality, Lahoud retorted that any Palestinian might do the same to settle in Lebanon.
As guarantor of the constitution, he demanded that ministers implement the law, he said.
The Lebanese parliament angered human rights organisations when it passed a law a year ago banning Palestinians from acquiring property in Lebanon.
The 376,000 Palestinian refugees living in wretched conditions in a dozen camps across Lebanon are subject to severe discrimination by the authorities, for fear that if they settle in the country they will upset its delicate religious balance.
They are also barred from practising some 60 jobs, bringing construction materials into their camps or having hospital treatment without advance payment or a guarantee from the UN Palestinian refugee agency that it will cover the cost.