Israeli troops have not struck deep into Lebanon since they withdrew from a southern border strip in 2000 after Hezbollah's Shi'ite fighters waged an 18-year war of attrition against them.

Israel is already engaged in an expanding military offensive in the Gaza Strip launched after Palestinian militants captured a soldier in a cross-border raid on June 25.

"Fulfilling its pledge to liberate the (Arab) prisoners and detainees, the Islamic Resistance ... captured two Israeli soldiers at the border with occupied Palestine," Hezbollah said in a statement.

"The two captives were transferred to a safe place," it said, without stating what condition the soldiers were in.

A Lebanese political source said Hezbollah was willing to discuss swapping them for prisoners held in Israel. A Hezbollah spokesman refused comment.

In 2004, Hezbollah exchanged a kidnapped Israeli businessman and the bodies of three Israeli troops for more than 420 Arab prisoners. Israel now holds at least three Lebanese prisoners.

Hezbollah said it had destroyed an Israeli tank that had entered Lebanon. Al-Jazeera television said a total of seven Israelis had been killed in yesterday's border violence.

Olmert called a special cabinet session to discuss further military action.

"It is an act of war by the state of Lebanon against the state of Israel in its sovereign territory," he said.

"We are already responding with great strength…. The cabinet will convene tonight to decide on a further military response by the Israel Defence Forces," Olmert added.

The international community condemned yesterday Hezbollah's capture of two Israeli soldiers, saying it undermined regional stability.

US Secretary of State Condoleezza Rice also urged Syria "to use its influence to support a positive outcome" and called on all sides to act with restraint. "Hezbollah's action undermines regional stability and goes against the interests of both the Israeli and Lebanese people," Rice said in a statement issued during a trip to France.

Rice pledged to work for the release of the soldiers and said she had spoken about the crisis with Lebanon's prime minister and Israel's foreign minister.

Despite condemning the raid, Rice also cautioned Israel, its top ally in the Middle East, from overreacting. "All sides must act with restraint to resolve this incident peacefully and to protect innocent life and civilian infrastructure," she said in the statement.

The Russian Foreign Ministry also issued a statement condemning the abduction and urging restraint.

UN Secretary-General Kofi Annan demanded yesterday that Hezbollah guerrillas release the captured Israeli soldiers and urged regional leaders to prevent an escalation of the conflict. "I condemn without reservation the attack that took place ... and demand that the Israeli troops be released immediately..." Annan told a news conference in Rome.

"I think they (regional leaders) should also do whatever they can to press all parties to exercise restraint. We are looking at a very dangerous part of the world and we would not want to see an expansion, an escalation of conflict in region," he said.

But Syria said Israeli actions were to blame for Hezbollah's attack. "Occupation is what provokes the Palestinian and Lebanese people," Vice President Farouq al-Shara told reporters.

In Gaza, Israel killed nine members of one Palestinian family in an air strike yesterday that destroyed a three-story residential building where top Hamas commanders were believed to be meeting.

The air strike was among a series of attacks that killed a total of 18 Palestinians as Israeli forces swept into central Gaza yesterday, broadening an offensive aimed at freeing a captured soldier and halting cross-border rocket fire.

(China Daily July 13, 2006)