Lebanese Prime Minister Fouad Siniora has demanded an immediate UN-backed ceasefire, denouncing Israel for turning his country into a 'disaster zone'. He appealed for foreign aid.
Israel has given local authorities the power to shut schools, factories and public institutions in the north, which has come under rocket fire from Hezbollah guerrillas in Lebanon.
The move falls short of a full state of emergency. The declaration of a 'Special Situation' takes effect immediately.
Israeli forces today bombarded a newly-built lighthouse in Beirut and sea-ports on the Lebanese coast.
At least two missiles hit the lighthouse in the Manara seafront neighbourhood.
Ports in Jounieh and Amsheet came under fire shortly after attacks against the ports in Beirut and Tripoli.
20 civilians, including 15 children, were killed when missiles from an Israeli helicopter gunship hit a convoy of residents in Shamaa, near the city of Tyre, fleeing border villages in south Lebanon.
Another 14 people were killed in other raids against bridges and petrol stations in eastern and southern Lebanon, including a strike that blocked the main border crossing into Syria.
Aircraft struck again at the headquarters of Hezbollah leader Hassan Nasrallah in Beirut's southern suburbs, destroying the nine-storey building and causing panic in surrounding streets.
It was not clear whether Mr Nasrallah - who declared 'open war' on Israel after a similar attack on his headquarters and home yesterday - was in the building at the time.
They also destroyed the office of a Hamas leader, Mohammed Nazzal. Hamas said Mr Nazzal had survived.
And Israeli jets bombed offices and houses of Hezbollah officials in Baalbek in eastern Lebanon.
Syria denied its territory had been hit in any of the attacks.
A fresh barrage of Hezbollah rockets hit northern Israel, including for the first time the Galilee town of Tiberias.
At least five rockets hit the town on the western shore of the Sea of Galilee, in what were the furthest rocket attacks into Israel so far.
Israeli authorities were warning that the rockets could hit Tel Aviv.
Israel recovered the body of one of four sailors missing after what it said was an attack by an Iranian-made rocket on a ship patrolling off Lebanon yesterday, bringing to nine the number of servicemen killed since Wednesday.
Another ship, an Egyptian civilian vessel, was hit and set ablaze in the attack.
The international community has appealed for restraint as the conflict, which erupted after Hezbollah guerrillas seized two Israeli soldiers in an attack on the Lebanon-Israel border, continues to escalate.
Israel's campaign aims not just to force Hezbollah to free the soldiers, but to destroy its ability to launch rocket attacks on northern Israel, where four civilians have been killed this week.
The violence in Lebanon comes amid a separate Israeli offensive in the Gaza Strip, launched after the capture of another soldier by Palestinian militants three weeks ago.
International criticism
Israel has been condemned by members of the UN Security Council for the use of 'disproportionate force' in both Lebanon and Gaza.
However despite the mounting international criticism, US President George W Bush has said Washington will not press Israel to halt its military operations.
Lebanon remains virtually cut off from the outside world after Israel imposed an air and sea blockade, launched repeated strikes on the country's only international airport and bombed the main highway to neighbouring Syria.
Lebanese Prime Minister, Fuad Siniora, has accused Israel of 'cutting his country to pieces' and demanded an immediate ceasefire.
The violence is the fiercest since a 17-day blitz on Hezbollah strongholds in southern Lebanon in 1996. Israel ended its 22-year occupation of the country in 2000.
