Rockets Fired From Lebanon Hit Northern Israel

At least four rockets were fired from Lebanon into northern Israel today, leading the Israeli army to return fire and raising fears that the conflict in Gaza could spread.

The exchanges came as Israeli air strikes destroyed several houses in the town of Rafah, on Gaza's southern border, today after what Palestinians said was one of the heaviest nights of bombing since the conflict began 13 days ago.

Intense artillery strikes, along with waves of aerial bombardment, were reported across the Gaza Strip.

Israeli tanks were seen moving in southern Gaza and leaflets were dropped near the border with Egypt warning residents to leave the area "because Hamas uses your houses to hide and smuggle military weapons".

Around 5,000 Palestinians fled their homes and took refuge in two UN schools that had been set up as shelters.

For the first time, the conflict widened to northern Israel, where four katyusha rockets fired from southern Lebanon landed near the town of Nahariya, injuring two people.

The Israeli military fired back at the point from which the rockets were launched.

Military officials said they were concerned about attacks by the Lebanese militant group Hezbollah. Two years ago, Israel fought a heavy, month-long war in Lebanon that claimed hundreds of lives.

As international negotiations to bring about a ceasefire in Gaza continued haltingly, the death toll among Palestinians rose to at least 688, with around 3,000 injured.

Palestinian health officials were reported as saying that around one-third of the dead were civilians, with 219 children and 89 women killed. Ten Israelis, three of them civilians, have died. Heavy fighting was reported near Khan Yunis, in southern Gaza, and in Jabalia, to the north, earlier today. At least one person was killed and 10 injured.

Despite days of intensive Israeli attacks, Palestinian militants were still able to fire rockets, hitting the city of Be'er Sheva overnight and Ashkelon and Ashdod this morning.

The Israeli military said it had captured 120 suspected Hamas fighters and had bombed the houses of two Hamas militants, in Rafah and Khan Yunis, overnight.

A total of around 60 sites were hit overnight, including, the military said, a mosque used to store weapons, 15 smuggling tunnels in the south, several rocket-launching areas and buildings housing weapons. It said several gunmen were also hit.

The UN security council has yet to reach an agreement on a ceasefire resolution, although the US has supported an initial deal outlined by France and Egypt. Although the French president, Nicolas Sarkozy, said both Israel and the Palestinian Authority - which is based in the occupied West Bank and is run by Hamas's bitter rival, Fatah - had accepted the deal, Israel said there was agreement on broad principles but there had yet to be an agreed plan for practical action.

Israel wants Hamas to halt all rocket firing into southern Israel and has called for an international arms embargo on the Islamist movement.

Hamas, which did not seem to be part of the French deal, wants an end to Israel's months-long economic blockade of Gaza.

The British foreign secretary, David Miliband, who was at the UN in New York, said: "I have seen the first glimmerings of the possibility of a ceasefire ... it's far too early to say we can get a breakthrough."

Yesterday, the Israeli cabinet agreed to continue with the fighting at the same time as it considered the ceasefire proposals.

Military planners have prepared for even more intense operations in Gaza in which Israeli soldiers would push deep into the crowded urban areas of the strip to attack Hamas gunmen.

Thousands of Israeli reservists have been called up and would be ready by Friday, Israeli defence officials said.