Israel told the United Nations on Wednesday it held Lebanon to blame for the capture of two of its soldiers by Hizbollah guerrillas, calling the act "a clear declaration of war."

Lebanese citizens inspect the damage to their house after an Israeli airstrike hit a neighboring suspected Hezbollah guerrilla position, unseen, in the village of Debbine, next to the southern town of Marjayoun, Lebanon, 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, two Lebanese civilians and a guerrilla were killed in the violence. [AP Photo]

Israel's government authorised what it called a severe response for the capture of the two soldiers and killed eight others in cross-border attacks.

A statement issued by Prime Minister Ehud Olmert's cabinet said Israel holds the Lebanese government responsible for the attacks and for the safe return of the seized soldiers. But it offered no details about what type of action would be taken.

Lebanese Prime Minister Fouad Siniora said his government had not known of the Hizbollah attack and did not endorse it or accept responsibility.

Hizbollah's bold attack returned it to the frontline of the Middle East conflict. It inflicted the heaviest losses Israel has suffered on its northern border since it withdrew from south Lebanon in 2000, and drew Olmert into a second crisis over captured soldiers.

Israel is engaged in a military offensive in the Gaza Strip after Palestinian militants captured a soldier on June 25.

Before the announcement in Jerusalem, waves of air strikes hit a dozen bridges and suspected Hizbollah posts, killing two Lebanese civilians and a Hizbollah fighter as well as disrupting fixed-line communications between Beirut and south Lebanon.

Hizbollah leader Sayyed Hassan Nasrallah said the soldiers had been seized to force Israel to release prisoners.

"What we did today ... is the only feasible path to free detainees from Israeli jails," he told a news conference in Beirut, proposing indirect negotiations, not confrontation.

But Israel rejected the offer.

"You don't negotiate with terror organisations," Gideon Meir, senior Israeli Foreign Ministry official, told reporters.

Israeli artillery soldiers are surrounded by smoke and dust as they fire across the border into southern Lebanon from a position on the frontier in Zaura, 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. [AP Photo]

Two Lebanese civilians were killed in an Israeli air raid on a coastal bridge at Qasmiyeh. Bombs hit 11 other bridges and at least 25 Lebanese were wounded, security sources said.

One bridge, at Damour village some 16 km (10 miles) south of Beirut, was hit 12 hours after the first shots were fired. Several suspected Hizbollah posts in south Lebanon also came under Israeli bombardment from land.

Israel killed at least 23 Palestinians, including nine members of one family on Wednesday in an air strike that destroyed a house where the army said senior Hamas commanders were meeting.

The White House condemned the Hizbollah attack and blamed Syria and Iran. Syria said Israeli actions were to blame for guerrilla attacks.

Hamas political bureau member Mohammad Nazzal told Reuters the capture of the two Israeli soldiers was a "heroic operation" and would help a campaign to free 1,000 Palestinians.

Lebanese civilians braced for Israeli bombs, but many Shi'ites in the south expressed defiance. "Israel will pay the price for any retaliation," said Hussein Mohammed, 55.

Sweets and Fireworks

The sources said the Israeli soldiers had been seized at around 9 a.m. (0600 GMT) across the border from Aita al-Shaab, some 15 km (nine miles) from the Mediterranean coast.

The Israeli army confirmed that two soldiers were captured and eight killed on the Lebanese frontier.

Hizbollah supporters set off fire crackers and distributed sweets in the streets of Beirut in celebration.

Nasrallah said Hizbollah had repelled an Israeli force that tried to go into Lebanon to hunt for the missing soldiers, destroying a tank and killing four crew members.

Footage on Hizbollah's al-Manar television showed a smouldering Israeli jeep, with a soldier's kit lying beside it. It showed smoke rising from an Israeli border post.

Israeli troops have not struck deep into Lebanon since they left six years ago after an 18-year struggle with Hizbollah.

"It is an act of war by the state of Lebanon," Olmert said of Hizbollah's action.

"Israel must act with appropriate severity in response to this attack and it will do so," the Israeli cabinet said. "Israel will respond in a forthright and severe manner against the perpetrators responsible and will act to prevent future efforts and actions directed against Israel."

Israeli Defence Minister Amir Peretz asked his commanders to prepare civil defence plans because of fears Hizbollah would fire long-range rockets at Israeli cities and industrial installations in the heart of the country.

U.N. Secretary-General Kofi Annan led widespread international calls for Hizbollah to free the two Israelis.

In 2004, Hizbollah swapped a kidnapped Israeli businessman and the bodies of three soldiers for more than 420 Arab prisoners after German mediation.

Germany said on Wednesday it was contacting Middle Eastern capitals about Hizbollah's Israeli prisoners, but declined to say if it was ready to mediate again.

Hizbollah, the only Lebanese faction to retain its weapons after the 1975-90 civil war, is also a political party with 14 members in the Beirut parliament.