As Saudi and Iranian leaders warned that continued fighting in Lebanon could spark a regional firestorm, Israeli Defence Minister Amir Peretz said Tuesday that Israel would be willing to hand over control of a security zone in southern Lebanon to an international force.

Peretz said Israel will establish and maintain the security zone until an international force is able to take control. But he declined to say whether Israel would continue its troop presence in Lebanon and enforce the zone with the help of air and ground forces.

Saudi King Abdullah bin Abdulaziz Al Saud: 'If the option of peace fails as a result of Israeli arrogance, then the only option remaining will be war.'
(Andy Wong/Associated Press)

His comments seemed to signal a slight shift in Israel's stance on the region. Israel has said it was opposed to an international force in southern Lebanon, saying it wanted the Lebanese army to keep the border secure. But recently, it said it was open to the idea of a force under NATO's command.

Perez said the security zone will be established by Israel. "There will be a security zone, which will be under the control of our forces if there is not a multinational force," he said.

"If there is not a multinational force that will get in to control the fences, a multinational force with an enforcement capability, we will continue to control [Hezbollah] with our fire toward any one who will get close to the defined security zone."

The Israeli military sealed off the Lebonese border town of Bint Jbeil, a Hezbollah stronghold, on Tuesday, but continued to battle militants in the streets.
(CBC News)

The Israeli offensive against the Lebanon-based militant group Hezbollah has continued for 14 days in the form of relentless air strikes against Hezbollah rocket launching sites, offices, headquarters, neighbourhoods and strongholds, mainly in Beirut and southern Lebanon.

Hezbollah has responded with rocket fire on towns and cities in northern Israel. Fighting continued to rage Tuesday between Israeli troops and Hezbollah fighters around Hezbollah strongholds in southern Lebanon.

Hundreds of civilians have been caught in the crossfire. Thousands of foreign nationals have fled the country.

'A conflict that would spare no one'

Saudi King Abdullah bin Abdulaziz Al Saud said the consequences of allowing the conflict to go unchecked would be frightening.

"If the option of peace fails as a result of Israeli arrogance, then the only option remaining will be war, and God alone knows what the region would witness in a conflict that would spare no one," Abdullah said in an official statement read on Saudi state television on Tuesday.

Abdullah said the Saudi government has tried to end the fighting that erupted between Israel and Lebanon-based Hezbollah militants on July 12.

"It must be said that patience can't last forever, and if the brutal Israeli military continues to kill and destroy, no one can foresee what may happen," Abdullah warned.

The Saudi king promised that Saudi Arabia will donate $1.5 billion US to Lebanon: $500 million for reconstruction and $1 billion to be deposited in the central bank to help restart the economy.

Iranian President Mahmoud Ahmadinejad, meanwhile, said that the conflict between Lebanon and Israel could trigger "a hurricane" of broader fighting in the Middle East.

Iran is believed to be a strong supporter of Hezbollah. In his remarks, Ahmadinejad alluded to a proverb that says: "He who raises the wind will get a hurricane."

"That proverb fully relates to the Middle East, which is a very volatile region," he said. "And it will be a strong hurricane which will strike really hard."
 
In Lebanon, security officials say the violence — mostly from Israeli military strikes — has killed more than 390 people, injured nearly 1,600 others and forced at least 600,000 to flee their homes.

In northern Israel, officials say more than 40 people have died and as much as a third of the population has fled, as Hezbollah lobbed more than 1,000 rockets southward.

'The intention is to deal with the Hezbollah infrastructure that is within reach.' — Israeli Col. Hemi Livni

Lebanon has been battered by the conflict and there were no signs that it was easing.

Israeli air strikes hit Beirut on Tuesday, the first in the Lebanese capital since Sunday evening. At least four heavy blasts were heard. They set off car alarms in central Beirut and left a billowing grey cloud in the south of the city.

Al Jazeera said about 20 Israeli rockets hit one of Beirut's southern district, a Hezbollah stronghold. 

Will stay in southern  Lebanon: Israeli colonel

Earlier, Israeli Col. Hemi Livni became the first senior military official to outline the army's plans since the offensive began, saying his country has no intention of sending ground forces beyond southern Lebanon.

The troops are focused solely on crushing Hezbollah outposts and rocket launching sites near the border with Israel, said Livni, who is in charge of forces in southwestern Lebanon.

"The intention is to deal with the Hezbollah infrastructure that is within reach," Livni told Israel Army Radio.

"That means in southern Lebanon, not going beyond that. I don't know of any intention to go 70 kilometres into Lebanon."

Livni said troops planned to surround border villages and root out Hezbollah.

Israel seals off Lebanese border town

On Tuesday, the Israeli military sealed off the Lebanese border town of Bint Jbeil, a Hezbollah stronghold.

After a day and night of fighting around the town, Israeli troops began an operation before dawn  and met with heavy resistance.

'There is fighting from every direction, including from the air. We are hitting terrorists, we have also taken several prisoners in this fighting.'-Israeli Lt.-Col. Itzik Ronen on the battle over a Lebanese border town

By morning, troops had seized houses on the edges of Bint Jbeil, but about 200 militants continued to battle.

"There is fighting from every direction, including from the air. We are hitting terrorists, we have also taken several prisoners in this fighting," Lt.-Col. Itzik Ronen, the deputy commander of a unit operating in the area, told Israel Army Radio.

"The enemy has more than a few casualties, and overall we are now stabilizing the situation to completely take over the village."

In other developments:

• Israeli missiles destroyed a house in the neighbouring market town of Nabatiyeh, killing a couple and their two sons as well as three other men, hospital and security officials said. It was not immediately clear why the Israeli planes had targeted the house.
• Sixteen Hezbollah rockets hit the city of Haifa, striking a seven-storey apartment building and a city bus, among other targets. More than two dozen people were injured.
• A Hezbollah strike on the Israeli Arab town of Maghar killed a teenage girl and injured three other people.

With files from the Associated Press