An Israeli missile incinerated a van in south Lebanon, killing 20 people, among them 15 children, in the deadliest single attack of the four-day-old campaign launched by Israel after Hizbollah captured two of its soldiers and killed eight.

Police said the van was carrying two families fleeing the village of Marwaheen after Israeli loudspeaker warnings to leave their homes.

Raids on roads and petrol stations in north, east and south Lebanon killed 12 people and wounded 32, security sources said, bringing the death toll in four days of Israeli attacks to 99. All but three of the dead have been civilians.

Hizbollah rockets, meanwhile, struck deeper into Israel than ever before on Saturday, wounding eight people and damaging two buildings in the Sea of Galilee town of Tiberias, police said.

Altogether 10 Israelis were wounded throughout northern Israel as about 80 rockets rained down from Lebanon. A military spokesman said Israel had deployed Patriot missile batteries in the northern city of Haifa to intercept Hizbollah rockets.

Rocket attacks have killed four civilians, including a child, in northern Israel this week.

President George W. Bush, who has declined to urge Israel to curb its military operations, said Syria should tell Hizbollah, which is also backed by Iran, to stop cross-border attacks.

In strikes on Beirut, Israeli warplanes flattened Hizbollah's nine-storey headquarters and destroyed the office of a Hamas leader, Mohammed Nazzal. An official of the ruling Palestinian Islamist group said Nazzal had survived the attack.

For the first time, Israel bombarded the ports of Beirut and Tripoli in the north, security sources and witnesses said.

Shortly after, Israeli warships bombarded Beirut's lighthouse and two ports in Christian areas north of the capital, a Lebanese security source said.

SYRIAN-LEBANESE BORDER

Israel's campaign in Lebanon coincided with an offensive it launched in the Gaza Strip on June 28 to try to retrieve another captured soldier, halt Palestinian rocket fire and destroy institutions of the Hamas-led government.

Israeli planes fired rockets near a Lebanese-Syrian border crossing, heightening fears that it could extend its campaign to Syria, which along with Iran is Hizbollah's main ally.

Israel said it had attacked targets only in Lebanon. A Syrian official also said Israel had not attacked Syria.

The Israeli army said it had struck about 150 targets in Lebanon so far, fewer than a dozen of them linked directly to Hizbollah. Most have hit civilian installations.

The assault has choked Lebanon's economy.

Israel aims not just to force Hizbollah to free the soldiers, which the Shi'ite group wants to trade for prisoners in Israel, but to destroy its ability to launch rocket attacks on northern Israel.

"The best way to stop the violence is for Hizbollah to lay down its arms and to stop attacking. And therefore I call upon Syria to exert influence over Hizbollah," Bush told a joint news conference with President Vladimir Putin at a summit in Russia.

The European Union, in a statement at the G8 summit, said Israel's assault on Lebanon was disproportionate.

Israeli army chief Dan Halutz said on Friday more targets would be bombed as part of the effort to remove Hizbollah from the border and replace it with a force answering to the Lebanese government.

LACKS UNITY

The Beirut government, led by an anti-Syrian coalition, lacks the unity and firepower to disarm Hizbollah, the only Lebanese faction to keep its guns after the 1975-90 civil war.

After Israel quit Lebanon in 2000, Hizbollah confined its attacks mainly to a disputed border area, but Wednesday's bold raid shattered tacit rules that had limited frontier violence.

The Israeli military said it had recovered the body of one of four sailors missing from a warship struck by Hizbollah off Beirut on Friday evening. A military source said Hizbollah had fired an Iranian-made missile at the vessel.

Hizbollah announced one of its fighters had been killed, only the second such death it has announced this week.

In Gaza, Israeli aircraft attacked the Palestinian Economy Ministry and a house where a Hamas militant was killed and eight people were wounded. Israel has killed about 85 Palestinians, around half of them militants since the offensive was launched.

Al-Hayat quoted the source as saying that "the US cannot rule out the possibility of an Israeli strike in Syria," this despite the fact that the Bush administration has asked Israel to "refrain from any military activity that may result in civilian casualties."

'Hizbullah made the same mistake'

The report also mentioned that President George W. Bush has repeatedly put much of the blame for the recent escalation on Syria.

"It is no coincidence that the Hizbullah operation comes at a time when the international community is working to impose sanctions on Iran due to its nuclear program and settle the score with Syria by establishing an international court to try those behind the assassination of former Lebanese Prime Minister Rafik Hariri," the Pentagon source said.

According to the source, Hizbullah made the same mistake as Hamas when it did not predict the ramifications of its actions and ignored the regional and international changes since the fall of Saddam Hussein.

The source said that Israel has indicated that it "will not end its military activity until a new situation is created that will prevent Syria and Iran from using terror organizations, such as Hamas and Hizbullah, to threaten its security."

SAINT PETERSBURG - Key world leaders struggled to draft a response to the raging Middle East crisis as US President George W. Bush defended Israel and blamed militants backed by Iran and Syria.

In talks dominated by Israel's devastating offensives in Lebanon and Gaza, leaders of the select Group of Eight major industrialized nations jettisoned their original energy-focused agenda to grasp for consensus on the Middle East.

The United States pressed for a tough statement identifying the root cause of the violence as the Lebanese Shiite movement Hezbollah and its allies Iran and Syria.

"As a sovereign nation, Israel has every right to defend itself against terrorist activity," Bush said after meeting British Prime Minister Tony Blair here.

He added: "Our message to Israel is defend yourself, but be mindful of the consequences. And so we've urged restraint."

But many G8 partners, notably Russian President
Vladimir Putin and some European leaders, say the Israeli assaults, in response to Hezbollah rocket attacks on the Jewish state and the abduction of three Israeli soldiers, are "disproportionate" and a waste of innocent life.

They have called for restraint by Israel which Putin said appeared to have "wider objectives" than simply retrieving its soldiers.

The Lebanon offensive has left more than 100 people dead on both sides -- Israeli warplanes bombed more targets Sunday while Hezbollah retaliated with rockets on Haifa, killing eight -- while scores have also died in Gaza where tanks rolled in again overnight.

Blair pointed his finger more directly at Damascus and Tehran. "The fact is there are people in that region, notably Iran and Syria, who do not want this process of democratisation and peace and negotiation to succeed," he said.

A French diplomatic source said senior G8 foreign ministry officials were working on a statement stopping short of an outright call for a ceasefire -- rejected by the United States -- but appealing for efforts to put in place the conditions for a truce.

The source said the statement would contain two other strands: protecting civilian lives and infrastructure, and shoring up the Lebanese government and Palestinian Authority.

The G8 countries -- as well as Britain, Russia and the United States, they are Canada, France, Germany, Italy and Japan -- are also due to discuss Iran's nuclear programme and North Korea's missiles during the summit, which runs to Monday.

One thing they did agree on Sunday was a joint statement on energy, vowing to promote "open, transparent" energy markets and develop alternative energy sources, including nuclear power, to counter soaring oil prices and declining fossil fuel reserves.

The statement may ease friction between Russia and European consumers after Moscow cut gas supplies to Ukraine in a price war earlier this year, resulting in disruption to markets in Europe.

Bush was due to have talks Sunday with Chinese President
Hu Jintao to map the way forward on North Korea after UN condemnation of its missile tests.

The presidents were expected to renew their call for Pyongyang to return to six-country talks on ending its nuclear weapons programme.

US Secretary of State Condoleezza Rice thanked Beijing for its support in helping pass the "remarkable" unanimous resolution.

"We really now have a coalition," Rice told reporters, saying North Korea "will have no choice but to return to the talks and pursue denuclearization of the Korean peninsula."

On Monday, the G8 leaders will meet with counterparts from the five major emerging market economies -- Brazil, China, India, Mexico and South Africa -- to try to rescue the floundering Doha round of trade liberalization talks.

Earlier, Russian and US negotiators failed despite intensive talks here to overcome lingering obstacles to a bilateral accord enabling Moscow to join the World Trade Organization, which sets global trade rules.

On the margins of the summit, Russian police halted an anti-G8 protest by some 50 activists in central Saint Petersburg and detained 37 of them, mostly foreigners, organisers said.

Israel has killed more than 100 people in a four-day bombardment of Lebanon. The offensive was triggered by a cross-border raid by Hezbollah guerrillas in which eight soldiers were killed and two others were captured. Fifteen Israelis have died in the fighting and the Shiite militant group has been raining rockets on northern Israel.

"It's unacceptable because people are still under shelling, bombardment and destruction is going on ... and people are dying," said Lebanese special envoy Nouhad Mahmoud.

Qatar, the only Arab nation on the council, received widespread support during closed council consultations late Saturday for a press statement calling for an immediate cease-fire, restraint in the use of force, and the protection of civilians caught in the conflict, council diplomats said.

But Argentina's U.N. Ambassador Cesar Mayoral said the United States objected to any statement and Britain opposed calling for a cease-fire.

The U.S. and Britain want to wait for the outcome of this weekend's Group of Eight meeting in Russia, an Arab League foreign ministers meeting, and a mission sent to the Middle East by Secretary-General Kofi Annan, Mayoral and other diplomats said.

France's U.N. Ambassador Jean-Marc de La Sabliere, the current council president, confirmed "there was no agreement on a text tonight, but we will meet on Monday."

"Many delegations would have liked to have a very prompt reaction," he said. "Others think the spotlight should be elsewhere, not here in the council. "

But Lebanon's Mahmoud protested, saying while innocent civilians are killed, "here we are impotent."

"It sends very wrong signals not only to the Lebanese people but to the Arab people, to all small nations that we are left to the might of Israel and nobody is doing anything," he said.

Lebanon's pro-Western government came to power following the February 2005 assassination of former prime minister Rafik Hariri, which led to Syria ending its 29-year occupation of its smaller neighbor. The Security Council has passed several resolutions promoting the full restoration of Lebanon's sovereignty and has urged it to deploy troops to the Hezbollah-dominated south to assert control there.

"We have many reasons to expect much more from the Security Council," said Mahmoud. And from the United States?

"They were always supportive in the last 1 1/2 years, but when it comes to Israel it seems things change," he said.

In another development, Undersecretary-General for Peacekeeping Jean-Marie Guehenno told reporters that Israel had rescinded a directive that would have restricted the movements of the 2,000-strong U.N. peacekeeping force in southern Lebanon, blocking it from carrying out its observer mission.

Iran and Hezbollah both denied cooperation but Iranian President Mahmoud Ahmadinejad condemned Israel's military offensive in Lebanon, saying "the Zionist regime behaves like Hitler," Iranian state television reported.

Among yesterday's other developments:

* More than 100 rockets fired from Lebanon struck deeper and deeper into Israel, hitting apartment buildings in the tourist-packed resort town of Tiberias on the Sea of Galilee, 22 miles south of the border.

* Israel stepped up round-the-clock bombing raids in an effort to destroy Hezbollah rocket caches in Lebanon, but one attack struck a convoy of civilians fleeing the fighting, killing 18. In all, 35 Lebanese were killed yesterday.

* Israeli officials fear Hezbollah terrorists still possess rockets with ranges of 60 to 120 miles that could strike Tel Aviv.

Authorities issued a warning to the 1.4 million residents of northern Israel to stay close to bomb shelters for the time being, and deployed Patriot-missile batteries in Haifa for the first time since the Gulf War in 1991.

* The Israeli air force continued bombing Hezbollah compounds in southern Beirut, in a bid to kill the group's leadership.

Warplanes also took out gas stations, roads and bridges near the Syrian border in an effort to completely seal off Lebanon.

As the violence escalated, Syrian strongman Bashar al-Assad expressed solidarity with Lebanon and pledged resources to help cope with Israeli attacks, threatening to plunge the region into further chaos.

* Israeli tanks also moved back into the northern Gaza strip, clashing with militants, killing two. The offensive is aimed at recovering a captured soldier and stopping armed groups.

Israeli tanks and armored personnel carriers, backed by helicopters firing machine guns, moved into farmland near Beit Hanoun, an area often used by militants for launching rockets.

* U.S. officials planned an airlift to evacuate the 25,000 American citizens believed trapped in Lebanon.

"As of the morning of July 15, we are looking at how we might transport Americans to Cyprus," the State Department said.

As the violence worsened, neither side appeared willing to back down on the fifth day of fighting since Hezbollah kidnapped two Israeli soldiers in a cross-border raid on Wednesday, and President Bush leveled stern warnings at Iran and Syria.

The guided-missile attack on the Israeli destroyer represented "a very profound fingerprint of Iranian involvement in Hezbollah," said Israeli Brig. Gen. Ido Nehushtan.

Iran denied involvement in a statement released by its embassy in Beirut. "These accusations by Israeli officials are baseless and constitute an attempt to escape reality and cover up the impotence of this regime in the face of resistance and the Lebanese people," the statement read.

Israel also claimed that the missile was fired using the Lebanese military's radar system, and used airstrikes to take out government radar sites along the coast.

In an emotional televised speech, Lebanese Prime Minister Fuad Saniora called on the United Nations to broker an immediate cease-fire to end Israel's land, sea and air offensive against Lebanon.

He also pledged to reassert government authority all over Lebanese territory. That would meet a repeated U.N. and U.S. demand.

Meanwhile, diplomatic efforts to resolve the dispute had yet to get off the ground.

Bush, at the G-8 summit in Russia, called on Hezbollah "to lay down its arms and to stop attacking."

Bush pointed the blame squarely at Hezbollah and Syria - the terror group's principal backer.

The violence, he said, was caused "because Hezbollah has been launching rocket attacks out of Lebanon into Israel and because Hezbollah captured two Israeli soldiers."

No one has the right to Palestine except our ancestors who died long ago, our generations who are struggling to expel the occupiers and the generations who are not yet born.

Palestine was carved out of Syria, the Arab homeland was ripped apart and mini states were created. We lost our unity, our freedom and we became under the rules of tyrants and oppressors. Our beloved Palestine was taken away from us by the Western Powers and by the Stalinist Russia and given to the Zionists. Since then, the Palestinians are resisting the foreign usurpation of the homeland and they will keep resisting until justice prevails and the six millions go back to their homes.

The aggression against the Palestinians did not stop since the beginning of last century and the massacres of the Palestinians continue until this very day. The massacres at large scale are considered genocide and the Palestinians are the victims. The perpetrators are the Western Imperialist Zionists allies. The Zionist forces are destroying our refugee camps, our towns, cities, farms, and infrastructure and contaminating our waters in the Gaza Strip. They are killing our women, our children and our people and the Western governments are giving their blessings to the criminals on our land.

Forty-five year old, Mr. Mohammad Erheem, who lives in Al-Issraa' west of Beit Lahiya stated that the occupation Zionist forces killed the sheep in his farm by burying them alive and he was jailed in one room of his house with the rest of his family.

The Zionist soldiers who occupied his house were drinking liquor, shouting and laughing every time a sniper among them killed or wounded a Palestinian from the town. These immoral racist soldiers were celebrating and dancing on our bleeding wounds with no respect to human feeling, but the story did not stop there. One of the soldiers took the family Qoran, tore it and stepped on it.

Before withdrawing from the neighborhoods of Al Atatira, Al Salateen, and Al Issraa', the soldiers destroyed many houses, bulldozed hundreds of acres, and uprooted olive, orange and lemon trees. Vineyards also did not escape their ravaging and destruction. They bulldozed the main and side roads, pulled down the electric and telephone posts, The water pipes were blown up, the cemetery of Al Issraa' was desecrated and tombs were leveled. Then, two mosques, Al Huda and Faith were severely damaged. The Zionists now expanded their war of aggression against Lebanon and not a single Western State has the morality to put a stop of this continuous war of aggression against the Arabs.

"Israel" is a racist-settler-colonialist entity that has no legitimate right to exist on our land. It pauses danger to our existence as a nation and those who created it have no conscience.

The Anti-War Movement and the progressive organizations in the West should come to a conclusion that the racist settler-invaders do not belong to Palestine, they should go back to the country of their origin or to the Mohave Desert to make it fertile and blooming. The Land of Milk and Honey is not theirs. It is ours; this land belongs to our people, to our martyrs and to our future generations. It is about time to end the hypocrisy and injustice, and to put an end to the genocide and starvation against the Palestinians.

Moshe Dayan who once said: "The key of any city is no more than a piece of Iron put under the "Israeli" tank to take the shape of the key we want... to suit the door of the city we want to take over...." The gallant Gazans are fighting and facing the Zionist tanks, planes, missiles and the siege of the Western governments. The tanks of the Zionists that Dayan was speaking of are treading over the Zionist dreams, his dreams and the Zionist entity's dreams

We tell all the friends and supporters of the Zionist aggression that our people will keep fighting. The American tanks and missiles with all the heavy armaments, and the blockade and starvation policies imposed upon the Palestinians will not deter them. Their determination is the total liberation of their land that stretches from the Mediterranean Sea to the Jordan River.

For Israel, the goal is to eliminate Hezbollah as a security threat -- or altogether, the sources said. A senior Israeli official confirmed that Hezbollah leader Hasan Nasrallah is a target, on the calculation that the Shiite movement would be far less dynamic without him.

For the United States, the broader goal is to strangle the axis of Hezbollah, Hamas, Syria and Iran, which the Bush administration believes is pooling resources to change the strategic playing field in the Middle East, U.S. officials say.

Whatever the outrage on the Arab streets, Washington believes it has strong behind-the-scenes support among key Arab leaders also nervous about the populist militants -- with a tacit agreement that the timing is right to strike.

"What is out there is concern among conservative Arab allies that there is a hegemonic Persian threat [running] through Damascus, through the southern suburbs of Beirut and to the Palestinians in Hamas," said a senior U.S. official who requested anonymity because of sensitive diplomacy. "Regional leaders want to find a way to navigate unease on their streets and deal with the strategic threats to take down Hezbollah and Hamas, to come out of the crisis where they are not as ascendant."

Hezbollah's cross-border raid that captured two Israeli soldiers and killed eight others has provided a "unique moment" with a "convergence of interests" among Israel, some Arab regimes and even those in Lebanon who want to rein in the country's last private army, the senior Israeli official said, speaking on the condition of anonymity because of the ongoing conflict.

Israel and the United States would like to hold out until Hezbollah is crippled.

"It seems like we will go to the end now," said Israeli Ambassador Daniel Ayalon. "We will not go part way and be held hostage again. We'll have to go for the kill -- Hezbollah neutralization."

White House officials said Friday that Bush has called on Israel to limit civilian casualties and avoid toppling the Lebanese government but has not pressured Israel to stop its military action. "He believes that the Israelis have a right to protect themselves," spokesman Tony Snow said in St. Petersburg, where Bush is attending the Group of Eight summit. "The president is not going to make military decisions for Israel."

Specifically, officials said, Israel and the United States are looking to create conditions for achieving one remaining goal of U.N. Resolution 1559, adopted in 2004, which calls for the dismantling and disarming of Lebanon's militias and expanding the state's control over all its territory.

"We think part of the solution to this is the implementation of 1559, which would eliminate that [armed group operating outside the government] and help Lebanon extend all of its authority throughout the whole country," national security adviser Stephen J. Hadley told reporters with Bush in Russia yesterday.

The other part of the resolution calls for the withdrawal of Syrian troops from Lebanon, which was completed in April last year -- after the assassination of former Lebanese prime minister Rafiq Hariri, which was widely linked to Syria.

If Lebanon as a first step takes over Hezbollah's stockpiles, which included more than 12,000 rockets and missiles before the current strife began, then cease-fire talks could begin, the Israeli official said.

"The only way a cease-fire will even be considered is if 1559 is fully implemented," said the senior Israeli official. Lebanese troops must be deployed to take over positions in Hezbollah's southern Lebanon strongholds to ensure that there are no more cross-border raids or rocket barrages into northern Israel.

There are no guarantees, however, that this strategy will work. Israeli airstrikes could backfire, experts warn.

"Hezbollah was risking alienating not only the Lebanese public at large but, incredibly, its very own Shiite constituency. But if Israel continues with its incessant targeting of exclusively civilian targets, and, as a result, life becomes increasingly difficult for the people, I would not be surprised if there is a groundswell of support for Hezbollah, exactly opposite of what Israel is trying to achieve," said Timur Goksel, an analyst and former spokesman for the U.N. force in Lebanon who lives in Beirut.

The Bush administration's position -- and diplomacy -- are the opposite of what happened during the Clinton administration.

The last Hezbollah-Israel cease-fire was just before dawn on April 27, 1996, after the United States brokered a deal to end a punishing 16-day Israeli offensive designed to end Hezbollah's rocket barrages. More than 150 Lebanese, mostly civilians, were killed; more than 60 Israelis were injured. Tens of thousands on both sides of the border had fled or gone into bunkers.

Then-Secretary of State Warren Christopher shuttled for a week between Jerusalem and Damascus to mediate a written agreement, a sequel to a similar oral deal he negotiated after skirmishes in 1993.

For now, that is not a viable option to end the current conflict, U.S. officials say. With its diplomacy redefined by the war on terrorism, the Bush administration has opted for a course that plays out on the battlefield.

Pressed on whether a cease-fire was possible soon, the Israeli official said it was "way, way premature" to consider an end to hostilities. "There is no sense to have a cease-fire without a fundamental change," he said. "That change is to make sure the explosiveness of the situation cannot carry over to the future. That means neutralizing Hezbollah's capabilities."

The Bush administration is also using Resolution 1559 as a barometer, U.S. officials say, acknowledging that the Lebanese government has shown neither the ability nor the willingness to deploy its fledgling army to the southern border.

U.S. officials have cautioned Israel to use restraint, particularly on collateral damage and destruction of infrastructure, which might undermine the fragile government. There was some U.S. concern about attacks on the Beirut airport, but otherwise Washington is prepared to step aside and defer diplomacy unless there is a dramatic break, U.S. officials say.

"They do have space to operate for a period of time," the U.S. official said about Israel. "There's a natural dynamic to these things. When the military starts, it may be that it has to run its course."

Israel and the United States believe that the Israeli strikes in Gaza, following the kidnapping of an Israeli soldier, have undermined Hamas. "There is no Hamas government -- eight cabinet ministers or 30 percent of the government is in jail, another 30 percent is in hiding, and the other 30 percent is doing very little," said the senior U.S. official.