U.S. & World

BEIRUT, Lebanon (CBS News) ― Israel Defense Minister Amir Peretz said Sunday that Israel will not stop its offensive in Lebanon until "the reality changes," adding that it will continue to target the sources of guerrilla rocket fire into northern Israel.

However, Peretz added, Israel will not reoccupy Lebanon, nor will it stay there for the long term.

And Lebanon's Cabinet issued a statement Sunday saying the country faces "real annihilation" by Israel, and accused the Jewish state of using banned weapons against Lebanese civilians.

"We are facing a real annihilation carried out by Israel," Information Minister Ghazi Aridi said after an emergency cabinet meeting.

"Israel is using internationally prohibited weapons against civilians," he said.

Speaking at a meeting with officials in Haifa, where eight people were killed Sunday in a missile strike, Peretz promised that the army would continue to fight the Lebanese guerrillas to stop the attacks on northern Israel.

"We've no intention of stopping this campaign until the reality has changed," he said. "Whoever hit Haifa will pay a heavy price."

Peretz also urged Israelis to be strong, remain calm and have patience, while the army continued its offensive to try to stop the rocket fire.

"Every source of fire will be dealt with," he said.

The Lebanese information minister did not elaborate on the weapons allegedly used. But there were Lebanese media reports, which could not be confirmed, that Israel had used phosphorus incendiary bombs and vacuum bombs, which suck up the air and collapse buildings.

Meanwhile, Lebanon's government said Sunday that Italy has relayed Israeli conditions to stop its assault on Lebanon: release the two captured Israeli soldiers and pull Hezbollah back from the Israeli border.

Aridi said Italian Prime Minister Romano Prodi spoke to Lebanese Prime Minister Fuad Saniora, and relayed the conditions made by Israeli Prime Minister Ehud Olmert.

Aridi said Prodi told Saniora that "Premier Olmert has two conditions for a cease-fire: handover of the captured soldiers and Hezbollah's withdrawal beyond the Litani (River)."

He said Prodi relayed Olmert's conditions to Saniora as part of a "personal initiative."

"Nothing is official because the real negotiations have not started yet," Aridi said.

The Litani River is about 18 miles north of Israel's coastal border with Lebanon. Israel invaded Lebanon in 1978 to push back Palestinian guerrillas beyond the Litani, to prevent rocket attacks on Israel's northern communities. Israel again invaded in 1982 and occupied Beirut, but withdrew gradually under guerrilla fire to a border buffer zone in 1985. That security zone was abandoned altogether in 2000.

Olmert said Sunday that there would be "far-reaching consequences" for the rocket attack on Haifa.

"Nothing will deter us," he said at the beginning of his government's weekly Cabinet meeting. "There will be far-reaching consequences in our relations on the northern border and in the area in general."

As the politicians exchanged fiery rhetoric, fighting on both sides showed no signs of subsiding.

Israeli airstrikes reduced entire apartment buildings to rubble and knocked out electricity in swaths of Beirut, and Israel dramatically escalated the ferocity of its campaign after Hezbollah rockets hit the northern city of Haifa.

Eight people were killed in Haifa when Hezbollah rockets smashed into the city train station in retaliation for Israel's overnight barrage on the capital. Soon after, Israeli warplanes bombarded the guerrilla group's headquarters in south Beirut again with a barrage of missiles, sending palls of smoke over the crowded residential area.

The toll continued to rise: Police said 130 people, almost all civilians, have died in Lebanon in the five-day Israeli onslaught. In Israel, 23 have died, including 15 civilians killed by rocket fire.

The Israeli military said it recovered the bodies of the three sailors missing since their ship was attacked off the coast of Lebanon Friday by a Hezbollah missile. The body of a fourth sailor was recovered in the wreckage Saturday.

Beirut, the capital city of 1.5 million people, was emptying as residents fled to the relative safety of the mountains and the eastern Bekaa Valley - though in the past 24 hours Israel expanded its strikes to the entire country.

Both sides warned of worse to come in the battle, sparked by Hezbollah's snatching of two Israeli soldiers last week. Fears mounted that the fight could expand as Israel accused Iran and Syria - top Hezbollah backers - of supplying the guerrillas with sophisticated new missiles that hit Haifa.

The Syrian government warned of an "unlimited" response if Israel attacks it. "Any aggression against Syria will be met with a firm and direct response whose timing and methods are unlimited," Information Minister Mohsen Bilal said.

And Hezbollah denied it received Iranian help and Tehran said it had no role in the fighting, disputing Israeli claims that 100 Iranian soldiers had helped Hezbollah attack the Israeli warship. Iran's President Mahmoud Ahmadinejad condemned the Israeli offensive, accusing Israel of "behaving like Hitler."

In other developments:

-- Israeli tanks and armored personnel carriers entered northern Gaza late Saturday, Palestinian residents said, approaching a Palestinian town. The Israeli military would not officially confirm the new incursion.

-- At the G-8 conference in St. Petersburg, Russia, President Bush blamed Hezbollah alone for the escalating violence in the Middle East, putting himself at odds with Russian President Vladimir Putin, who said he believed Israel was pursuing wider goals in its military campaign than the return of abducted soldiers.

-- CBS News has learned that an evacuation of Americans from Lebanon will most likely begin next week. The evacuation would be led by the USS Iwo Jima, with Marine helicopters ferrying as many as 8,000 Americans to nearby Cyprus.

The damage in southern Beirut - a teeming Shiite district where Hezbollah's main headquarters complex is located - was colossal after Israel unleashed its worst bombardment yet overnight, before the Haifa strike. A series of 18 explosions rocked the city before sunrise.

Al-Manar television, Hezbollah's main voice to the world, was knocked off the air for eight minutes by the pounding. The Jiyeh power plant, on the southern outskirts, was in flames after being hit, cutting electricity to many areas in the capital and south Lebanon. Firefighters pleaded for help from residents after saying they didn't have enough water to put out the blaze.

The southern suburbs were repeatedly blasted by Israeli warplanes for most of Saturday, but the early Sunday raids were the heaviest since Israel launched its offensive Wednesday in retaliation to the capture of two Israeli soldiers by Hezbollah guerillas.

Thousands of residents of those neighborhoods – by definition supporters of Hezbollah – have moved out, reports CBS News correspondent Elizabeth Palmer. They are taking shelter in schools and other public buildings.

But, Palmer reports, not all of them are happy about Hezbollah's actions.

"This is impossible, we have sick kids," Zeinab, a young mother carrying her child, complained. "Why don't they just exchange the two soldiers?"

Large swaths of the capital were covered in fine white dust from the barrage. Around the Hezbollah compound in the southern district known as Dahiyah - entire blocks were littered with heaps of rubble and twisted metal, and fires raged.

Hezbollah denied Israeli media reports that its leader, Sheik Hassan Nasrallah, had been wounded in an airstrike Sunday, the Arab and Lebanese media said.

Trying to defuse the crisis, Lebanon's Western-backed, anti-Syrian prime minister indicated Saturday night he might send his army to take control of southern Lebanon from Hezbollah guerrillas - a top U.N. demand but also a move that might risk civil war.

Choking back tears, Prime Minister Fuad Saniora went on television to plead with the United Nations to broker a cease-fire for his "disaster-stricken nation."

Saniora did not elaborate on how his government would work with the United Nations to reassert Lebanese authority over its entire territory.

But on Sunday, Lebanon's president, Emile Lahoud, a staunch pro-Syrian and close ally of Hezbollah, vowed that Lebanon "will not surrender" and blasted the United Nations, saying it was procrastinating in intervening to give Israel time to force Lebanon into submission.

Reacting to Saniora's statements, Israel's Vice Premier Shimon Peres said Lebanon must prove it was serious by deploying troops on the border.

In Cairo, Egypt, foreign ministers of 18 Arab countries also asked for U.N. help. The Arab League passed a unanimous resolution calling on the U.N. Security Council to intervene to stop the escalating crisis in the region.

(© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)