I side with the Elder and his party. The fight is easy enough if you let the two duergar factions fight each other while you try to concentrate on Nere. It's important to stay away from the edges as those duergar do like a good shove.
I had a problem in EA once where Nere got shoved into the lava by a duergar. I can't remember if the body was too far out in the lava or you can recover his gear but not his decapitated head for the myconid king. Either way, I was unable to close that quest.
After the fight you can persuade the Elder fella to leave the gnomes behind.
Last edited by The Red Queen; 24/08/23 10:37 PM. Reason: Added spoiler tags