Eight die in Hizbollah rocket attack [video report]

HAIFA, Israel - Hizbollah has killed eight people in a rocket attack on the Israeli city of Haifa, saying it was only the beginning as Israel pursued a five-day-old assault in Lebanon.

Israeli Prime Minister Ehud Olmert said Hizbollah's deadliest rocket strike on the Jewish state would have far-reaching consequences for Lebanon.

Hizbollah leader Hassan Nasrallah said the attack on Haifa, Israel's third-largest city, was in retaliation for the Jewish state's killing of civilians and promised more "surprises". "We are just at the beginning," he said in a televised address.

Medical staff said 20 people were wounded in Haifa, which was hit by about 20 rockets. One that hit a railway station caused most of the casualties.

In Lebanon's southern port city of Tyre, Israeli air strikes killed at least 10 civilians and wounded scores, witnesses said. They said most of the casualties were caused by an attack on a building used by rescue workers.

Israel's campaign in Lebanon, launched after Hizbollah captured two Israeli soldiers and killed eight on Wednesday, has killed 126 people, all but four of them civilians.

It has drawn only a mild plea for restraint from the United States, which blames Hizbollah and its allies, Syria and Iran.

US President George W. Bush, speaking at a G8 summit in Russia, characterised Israel's actions as self-defence and did not back Lebanon's pleas for an immediate cease-fire.

"Our message to Israel is defend yourself but be mindful of the consequences, so we are urging restraint," said Bush.

A total of 24 Israelis have been killed in the fighting since Wednesday, including 12 civilians killed in rocket attacks. Hundreds have been wounded.

Lebanon said Italian Prime Minister Romano Prodi had relayed Israeli conditions for a cease-fire. A government statement quoted Prime Minister Fouad Siniora as saying Israel had demanded the return of the two soldiers and a Hizbollah pullback to behind the Litani river, 20km north of Israel.

An Italian government source confirmed the demands and said Prodi was acting as a "go-between".

European Union foreign policy chief Javier Solana arrived in Beirut on Sunday and met Siniora. A UN envoy also visited the Lebanese capital.

Bombs thudded into Beirut's Shi'ite southern suburbs in raids which set fire to Hizbollah's al-Manar television complex and nearby buildings, witnesses said. The station's signal disappeared briefly several times.

The air strike in Tyre raised to 22 the number of civilians killed in warplane raids in south Lebanon on Sunday, Lebanese security sources said.

The United States earlier blocked any move by the UN Security Council to demand a cease-fire, saying the focus for diplomacy should be the G8 summit in St Petersburg.

German Chancellor Angela Merkel said the G8 countries were demanding Hizbollah release the two Israeli soldiers and halt attacks on Israel as a way of ending the violence, "and then naturally for Israel to halt military action".

Syrian Information Minister Mohsen Bilal said there would be a "harsh and direct" response to any attack on Syria's territory by Israel.

Hizbollah said it had fired "Raad (Thunder) 2 and Raad 3" rockets at Haifa. A senior political source said Israel's army chief, Dan Halutz, had told a cabinet meeting that "some of the missiles were probably produced by Syria".

Israel raised the alert level in Tel Aviv, 130km south of Lebanon, as a precaution. Halutz has said Hizbollah has rockets with a range of 70km and possibly longer.

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