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Smokes rise from the border of Israel and Lebanon, July 12, 2006. Israeli Air Forces carried out strikes against Hezbollah targets in southern Lebanon and 30 targets have been attacked so far on Wednesday. (Xinhua Photo)

An Israeli artillery unit fires across the border into southern Lebanon from a position on the frontier in northern Israel, Wednesday, July 12, 2006. Hezbollah fighters launched a raid into Israel and captured two Israeli soldiers Wednesday, triggering an Israeli assault with warplanes, gunboats and ground troops in southern Lebanon to hunt for the captives. Seven Israeli soldiers and two Lebanese were killed in the violence. (Xinhua/AFP Photo)

JERUSALEM, 12 (Xinhua) -- Lebanese Hezbollah militia kidnapped two Israeli soldiers in a cross-border raid Wednesday morning, arousing a fierce response of Israeli army and bringing the regional tension up to a new height.

Seven Israeli soldiers were killed in the clashes between the Jewish troops and the Hezbollah militants, an Israeli army spokeswoman said on Wednesday.

Three soldiers were killed when the Hezbollah militants attacked two Israeli army jeeps patrolling along Israel's border with Lebanon Wednesday morning, in which the two soldiers were captured, the spokeswoman said.

Another four, who were searching for the two abducted soldiers in south Lebanon, were killed when their tank was attacked by Hezbollah militia, she added.

After the abduction, Hezbollah demanded that Israel release prisoners held in Israeli jails, Lebanese militant Samir Al-Kuntarin particular, in exchange for the two soldiers.

Hezbollah leader Sheik Hassan Nasrallah said the captive soldiers would only be released as part of a prisoner swap, adding that Israel's military campaign in Lebanon would not win the freedom of the hostages.

However, Israeli Prime Minister Ehud Olmert rejected to negotiate over the fate of two soldiers who went missing during the border violence, calling the attack "an act of war".

"It is an act of war by the state of Lebanon against the state of Israel in its sovereign territory," Olmert said at a news conference, vowing a "very painful and far-reaching" response.

Israeli troops traded fire with Hezbollah militia across the border after at least two rockets fired by Hezbollah hit northern Israel, wounding four Israelis.

Israeli tankers shelled Hezbollah strongholds and Israel Air Forces (IAF) aircraft pounded bridges, roads and a power plant in southern Lebanon in a bid to limit the militants' movement. IAF planes also hovered over the Lebanese capital of Beirut.

Some four Lebanese were also killed in the clashes between the two sides.

"The two captives were transferred to a safe place," Hezbollah said in a statement, without saying what condition the soldiers were in.

Israeli Defense Minister Amir Peretz demanded the Lebanese government act immediately to solve the crisis.

The Defense Ministry said in a statement that it held the Lebanese government "directly responsible" for their fate and safe return.

The IDF is preparing itself for an operational response on all fronts, pursuant to the situation's recent escalation.

Israeli media said that the IDF on Wednesday afternoon sent troops across the border to search for the missing soldiers, marking the first incursion into Lebanon since the withdrawal in May 2000, but an IDF spokesman said he could not confirm the report.

The IDF also ordered troops deployed on the Lebanon and Gaza borders on high alert in the event that armed groups may attempt to fire Katyusha and Qassam rockets into Israel. Enditem

Israeli PM calls Hizbollah attack "act of war"

JERUSALEM, July 12 (Xinhua) -- Israeli Prime Minister Ehud Olmert on Wednesday called the Lebanese Hizbollah's attack on the northern Israeli border "an act of war."

"It is an act of war by the state of Lebanon against the state of Israel in its sovereign territory," Olmert said at a news conference.

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

The Israeli prime minister also vowed a "very painful and far-reaching" response, adding that Israel would not negotiate over the fate of two soldiers who went missing during the border violence.

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Israel to dismantle Hezbollah by diplomatic way: cabinet

JERUSALEM, July 12 (Xinhua) -- In an urgent cabinet meeting on Wednesday evening, the Israeli government decided to use international pressure to dismantle Hezbollah, the Yedioth Ahronoth daily reported.

In response to Hezbollah's attack earlier in the day, the Israeli government planned to ask the international community to enforce UN resolution 1559, calling on the Lebanese army to supervise the border between Lebanon and Israel, which is recognized by the UN.

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Israel capable of fighting on two fronts: IDF

JERUSALEM, July 12 (Xinhua) -- Israel Defense Forces (IDF) has the ability of conducting military operations on two fronts -- the northern border with Lebanon and the Gaza Strip, an IDF spokesman said on Wednesday.

Col. Boaz Kohen, spokesman of the IDF Northern Command, told reporters that Wednesday's attack by Hezbollah, the Lebanon-based guerrilla, has been long planned and it was not yet clarified if it is related to the capture of an Israeli soldier by Palestinian militants in the Gaza Strip 17 days ago.

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Hezbollah says not to escalate clash with Israel

BEIRUT, July 12 (Xinhua) -- Lebanese Hezbollah leader Hassan Nasrallah said on Wednesday that Hezbollah, which captured two Israeli soldiers, did not intend to escalate clash with Israel while insisting on swapping prisoners.

"Our action is aimed at exchanging prisoners (in Israeli jails), we do not want to escalate clash or drag Lebanon and the region into war," Nasrallah told a press conference.

"But if the enemy (Israel) wants escalation, we are ready for it", Nasrallah added.

Hezbollah militants seized two Israeli soldiers when they attacked two Israeli army jeeps patrolling along the border with Lebanon Wednesday morning, demanding that Israel release prisoners held in Israeli jails in exchange for the two soldiers.

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Hezbollah leader says to free Israeli soldiers only in swap

BEIRUT, July 12 (Xinhua) -- Lebanese Hizbullah leader Hassan Nasrallah said on Wednesday that two Israeli soldiers abducted by its militants will only be returned through "indirect negotiations and an exchange of prisoners".

"They will only return home through indirect negotiations and an exchange of prisoners," Nasrallah said in a press conference, hours after his Hizbullah militia captured two Israeli soldiers in a cross-border raid.

Nasrallah proposed a package deal in which the two Israeli soldiers, along with a third captured by Palestinian militants in Gaza on June 25, would be traded for Arab prisoners in Israeli jails.

"What we did today is the only feasible way to free detainees from Israeli jails," he added.

Nasrallah also warned that it would be an "illusion" if Israel wanted to free the soldiers by military campaign.

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Special report: New clash between Israeli, Lebanese troops