Hezbollah's deputy leader denied its fighters fired on Haifa, but Israel blamed the group, which had warned earlier in the day it would strike the city if Beirut were targeted. Israeli officials said it was a Katyusha rocket launched from southern Lebanon. Witnesses also confirmed that a rocket hit the city.

The militants also fired rockets at four other northern Israeli towns, killing a 40-year-old woman on her balcony in Nahariya and a man in Safad.

Soon the Haifa attack, Israeli helicopter gunships raked fuel depots at Beirut's seaside airport. Earlier in the day, warplanes shut down the airport with strikes that pounded craters into all three of its runways, and Israeli warships sealed Lebanon's ports.

Among the Lebanese dead were a family of 10 and another family of seven, killed when strikes hit their homes in the southern village of Dweir.

"It's a massacre," said Abu Talal, a 48-year-old resident who joined scores of Hezbollah supporters and townspeople at the funeral of Shiite cleric Sheik Adel Akkash, who was killed along with his wife and eight children, ages 3 months to 15 years.

"This is the (Israeli) arrogance. The raids aim to terrorize us, but morale is high."

The last time Israeli strikes targeted Beirut was in 2000, when warplanes hit a power station in the hills above the city after a Hezbollah attack killed Israeli soldiers.

Israel says it holds Lebanon responsible for Hezbollah's snatching of the two soldiers, Ehud Goldwasser, 31 and Eldad Regev, 26. The Lebanese government insisted it had no prior knowledge of the move and even withdrew its ambassador to the U.S. after he made comments seemingly in support of the guerrillas.

Lebanon's government has no control over Hezbollah but has long resisted international pressure to disarm the group. Any attempt to disarm Hezbollah by force could lead to sectarian conflict.