(An Israeli armored personnel carrier comes back from the Lebanese village of Aita el-Shaab towards their base close to the northern town of Shtula. Thousands of refugees fled the port city of Tyre as Israeli forces stepped up their campaign to drive Hezbollah fighters from southern Lebanon and said they would resume full air raids after a two-day pause. Photo: AFP)

Israel has spread its military campaign against Hezbollah in Lebanon to its northernmost point in three weeks of fighting, striking outside Baalbeck in the Bekaa Valley near the Syrian border, Lebanese security sources say.

The Israel Defense Forces had no comment on the report, but on Tuesday the Israeli security Cabinet approved an expansion of the campaign in Lebanon.

Israeli troops hit the ground about 10 kilometers north of Baalbeck late Tuesday as fighter jets and helicopters flew support missions in the sky near the eastern Lebanese town, Lebanese security sources said.

The Lebanese army also reported heavy helicopter traffic east and west of the town.

Israeli soldiers also engaged in heavy fighting Tuesday with Hezbollah fighters inside southern Lebanon as part of the campaign that an Israeli minister said has wiped out 300 of the estimated 2,000 Hezbollah fighters in Lebanon.

Arabic language networks reported that Hezbollah denied the figure announced Tuesday by Israeli Justice Minister Haim Ramon.

"Hezbollah has taken a serious beating and that is why the pressure of a ground offensive will produce the expected results," said Ramon, speaking on Israeli Channel 10.

Israeli Prime Minister Ehud Olmert said conditions are not yet right for a cease-fire because the military campaign is successfully disarming Hezbollah.

Israel: Some militants arrested

The IDF confirmed that Israeli troops operating in Baalbeck hit a number of militants and arrested some of them, although no numbers were given. There were no injuries among Israeli soldiers, the IDF said, and the arrested militants were taken to Israel.

Lebanese authorities said nearly 560 civilians and soldiers have also been killed, most of them as a result of Israeli airstrikes. Israel has reported 54 deaths, including 19 civilians killed by Hezbollah rocket attacks.

While Hezbollah attacks into northern Israel have subsided in the past two days, Ramon said the Lebanese militia has increased its number of rocket launches from areas north of the Litani River, where the Israeli military has asked residents in two locations to evacuate.

In its initial quest to create a security buffer to protect northern Israel from Katyusha rockets, the Israeli military said it wanted Hezbollah fighters to push back to the Litani River, which is about 20 miles (32 km) from the Israeli border.

Ramon said Israeli military forces have said they need at least another month "to accomplish their goals."

Vice Premier Shimon Peres, in Washington to meet with Secretary of State Condoleezza Rice, told reporters he was pleased with the progress and that the end of the war was "not far away."

"The minute it will stop, it will stop," he told reporters after the meeting. "But the minute there will be an international force that will control the southern part of Lebanon and the hostages will be released and the rockets and the missiles will be controlled and the Hezbollah will stop being an army within an army, then we shall have peace.

"In my judgment it's not far away, you can count it in matters of weeks, not months."

But Rice saw the process going more quickly.

"If we really put our minds to it and work, this week is entirely possible," she said on PBS' "NewsHour." "Certainly we are talking about days, not weeks, before we are able to get a cease-fire."

Differing casualty claims

In the past two days of fighting, Israeli forces have killed or wounded more than 20 Hezbollah fighters across southern Lebanon, the IDF said.

Hezbollah issued a statement saying four of its fighters died in Tuesday's combat.

Tuesday's fighting was concentrated near the villages of Tayba just outside the Israeli town of Metulla, and further west near the Lebanese village of Aita Al-Shaab.

The IDF said three of its soldiers were killed and 25 wounded in the fighting in Aita Al-Shaab. Five other soldiers were wounded by a mortar shell on the Israeli side of the border, it said.

Israeli forces entered Aita Al-Shaab around noon on Monday, the IDF said.

Aita Al-Shaab is near the spot where Hezbollah fighters crossed into Israel on July 12 and captured two Israeli soldiers and killed three others, sparking the current offensive between Hezbollah and Israel.

Just outside the village, the U.N. Interim Force in Lebanon reported intensive Israeli shelling in the villages of Ramia, Dibil, and Qawzah on Monday and Tuesday morning.

In Tayba, the IDF said it has taken control of several strategic positions in the town, which it says has been used by Hezbollah fighters to launch missiles at northern Israel over the past two weeks.

Israeli police reported 14 cross-border strikes hitting northern Israel on Tuesday, two using Katyusha rockets and 12 using mortar shells.

East of Tayba, Israeli forces Tuesday heavily shelled the town of Kfar Kela a day after pounding it with airstrikes, according to U.N. observers in southern Lebanon.

Israeli forces have also been operating in the areas of Odaise and Rab Talateen for the past two days, according to the IDF.

To the west, U.N. officials said, Israeli gunboats in the Mediterranean pounded southern Lebanon, while Lebanese security sources said militants fired three salvos of Katyusha rockets into Israel from the central section of south Lebanon.

UNIFIL also reported that the Israeli military is maintaining its presence in Maroun Al-Ras, which Israel described as its first foothold in southern Lebanon, to create a security buffer to stop Hezbollah attacks on northern Israel.

Aid process difficult

U.N. Secretary-General Kofi Annan met Tuesday with representatives of the five permanent Security Council members to discuss how to stop the fighting, deliver aid to civilians and send a multinational force into southern Lebanon.

The United Nations said it had little success getting aid into southern Lebanon before the end of Israel's self-declared 48-hour lull in fighting.

The European Union said it approved $64 million in humanitarian aid for Lebanon, and EU foreign ministers called on Israel and Hezbollah to agree to an "immediate cessation of hostilities."