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Lebanese Prime Minister Fuad Saniora says he will 'spare no avenue' to make Israel compensate for Lebanon's losses. ((Mahmoud Tawil/Associated Press))

Lebanon's leaderappealed Wednesday for an end to eight days of hostilities between Israel and Hezbollah, saying the violence has killed 300 people in his country, wounded 1,000 and displaced more than half a million others.

"Is this what the international community calls the right of self-defence? Is this the price to pay?" Prime Minister Fuad Saniora asked, in a swipe at countries that have defended Israel's decision to send in planes, tanks and troops as measured self-defence.

Saniora's comment, made ata gathering in Beirut that included U.S. Ambassador Jeffrey Feltman,included the first official casualty figures out of Lebanon since Israel began military strikes after Lebanese-based Hezbollah militants conducted a cross-border raid on July 12.

Saniora also said he would "spare no avenue" to make Israel compensate for Lebanon's "unimaginable losses."

But Israel's cabinetsaid it has no plans to back down.

"The intensive fighting against the Hezbollah organization shall continue … with the aim of returning the kidnapped soldiers to Israel, bringing about the cessation of rocket fire on communities and Israeli targets and to remove this threat," said astatement from the inner cabinet.

Rice continues diplomatic efforts

Meanwhile, diplomatic efforts to bring an end to the violence continued as U.S. Secretary of State Condoleezza Rice spoke over the phone with Israeli Prime Minister Ehud Olmert, European Union foreign policy chief Javier Solana and Egyptian Foreign Minister Ahmed Aboul Gheit.

The U.S. has rejected calls for an immediate ceasefire, saying the captured soldiers must first be returned and the rocket attacks end.

Rice has said she is trying to build support for a ceasefire of "lasting value" that would see Lebanon's army take over control of the country's south.

A day earlier, she said she hoped for a ceasefire when conditions were conducive.

She will meet with United Nations SecretaryGeneralKofiAnnan and Solana on Thursday evening in New York and could travel to the Middle East as early as this weekend.

A UN team is on its way back to New York to brief Annan, who willdeliver the report to theSecurity Council on Thursday.

The team, sentearlier this week, was denied entry to Syria because Damascus objected to a member who has written previous reports demanding Syrian troops leave Lebanon.

World leaders have been split on their reaction to the crisis, with Canada and the United States defending Israel's military actions as a reasonable response while some other Western countries condemned it as an overreaction.

Arbour suggests killings could be war crimes

Meanwhile,UNhuman rights chief Louise Arboursaidthe scale of killings in the region could involve war crimes.

"International humanitarian law is clear on the supreme obligation to protect civilians during hostilities," saidArbour in a statementWednesday.

"This obligation is also expressed in international criminal law, which defines war crimes and crimes against humanity. …The scale of the killings in the region, and their predictability, could engage the personal criminal responsibility of those involved, particularly those in a position of command and control."

Arbour, a former Canadian Supreme Court judge and war crimes prosecutor, didn't single out any government.

Her comments come as UNICEF and the World Health Organization said the violence is hindering the movement of humanitarian supplies and warned of the serious psychological effects of the fighting.

"The psychological impact is serious, as people, including children, have witnessed the death or injury of loved ones and destruction of their homes and communities," the organizations said in a joint statement.