IBL EL-SAQI, Lebanon - Israel grabbed strategic high ground in south Lebanon on Thursday but delayed a major push northward, as diplomats cited progress toward agreement on a U.N. cease-fire resolution that could soon go to a vote.

An Israeli soldier watches a tank as it leaves the Lebanon side of the Israel-Lebanon border, August 10, 2006.[Reuters]

With Israeli troops closer to Beirut than at any time since the war began, diplomats said they were close to unlocking the stalemate over a U.N. effort toward a cease-fire. The U.S. Ambassador to the U.N., John Bolton, said a vote was possible on Friday.

The United States and France have been trying to bridge differences over a timetable for an Israeli withdrawal from Lebanon.

Israeli ground troops took control of the mainly Christian town of Marjayoun before dawn and blasted away throughout the day at strongly fortified Hezbollah positions in several directions.

An Israeli soldier was killed and two were wounded in fierce battles with Hezbollah guerrillas Thursday, a day after the Israeli military suffered its worst one-day military loss, with 15 soldiers killed. More than 800 people have died in the month-long conflict, including 715 in Lebanon.

A huge explosion rocked the center of the town and the surrounding countryside about sunset and a big fire could be seen raging from a vantage point in Ibl el-Saqi, about two miles to the east.

By taking Marjayoun the Israeli army was closer to Beirut than at any time since the fighting began July 12 after a cross-border raid in which Hezbollah captured two Israeli soldiers and killed three.

At the same time, the army was still within about five miles of the Israeli border. Marjayoun, which sits near major road junctions in the south, lies due north of Israel's Galilee panhandle that juts north into Lebanon.

Marjayoun was used as the command center for the Israeli army and its allied Lebanese militia during an 18-year occupation of south Lebanon that ended in 2000. The high ground around Marjayoun, including the village of Blatt, overlooks the Litani River valley, one of the staging sites for Hezbollah's relentless rocket assaults on Israel.

Diplomatic efforts had stalled as the Lebanese called for Israeli troops to start pulling out once hostilities end and Beirut sends 15,000 troops of its own to the south, while Israel has insisted on staying in southern Lebanon until a robust international force is deployed, which could take weeks or months.

"We've closed some of the areas of disagreement with the French," U.S. Ambassador to the U.N. John Bolton said.

Suggestions that a new resolution was in the works also emerged.

"A new proposal is being drafted, which has positive significance that may bring the war to an end," Israeli member of parliament Otniel Schneller quoted Israeli Prime Minister Ehud Olmert as saying. "But if the draft is not accepted there is the Cabinet decision."

The Israeli Security Cabinet authorized Olmert to expand the current offensive in Lebanon, but Israeli officials said they would hold off to give diplomacy more time to work.

"If we can achieve that by diplomatic means and are sure that there is an intention to implement that document, we shall definitely be in a position where the military operation has achieved diplomatic space and a new situation has been created here in the north," Israeli Defense Minister Amir Peretz said.

But he warned Israel was ready to use "all of the tools" to cripple Hezbollah if efforts toward a cease-fire failed.

Lebanese Prime Minister Fuad Saniora met twice Thursday with U.S. Ambassador Jeffrey Feltman. An aide to the Lebanese leader, who spoke on condition of anonymity because he was not authorized to release information, said new ideas for ending the fighting involved combining two envisioned resolutions into one overarching document.

Broadly speaking, the U.S.-French draft Security Council resolution called for a cessation of hostilities and the deployment of the Lebanese army into southern Lebanon to the Israeli border, in cooperation with U.N. peacekeepers who are already there. As the Lebanese start deploying, the Israeli army will begin withdrawing, according to council diplomats.

Lebanese Interior Minister Ahmed Fatfat told The Associated Press about 350 Lebanese soldiers and police garrisoned in Marjayoun were taken into custody. Residents said the Israelis also took over one building in the barracks, locked up the ammunition and weapons depot and took away the keys.

An Israel military spokeswoman said troops arrived at a building in the town, where there were soldiers, police and refugees, but only advised them to remain there for their own safety.

"Nobody has been taken prisoner," she said, declining to be identified because military rules did not allow her to make public comments.

Israel reported one of its soldiers was killed and two were wounded in Qleia, just south of Marjayoun, when Hezbollah guerrillas fired a missile at a tank. Hezbollah reported killing as many as 16 Israeli soldiers and destroying 18 tanks.

Two Israeli civilians also died in Hezbollah rocket attacks, an Arab-Israeli mother and her young daughter in the village of Deir al-Assad. Israel reported 160 Hezbollah rockets landed during the day.

On the Lebanese side the death toll was significantly lower than in recent days, with only four people killed, all of them civilians hit in Israeli air and artillery strikes.

More than 800 people in Lebanon and Israel have died since fighting erupted ¡ª 715 on the Lebanese side and 121 on the Israeli side.

In Beirut, Israeli warplanes blanketed the downtown area with leaflets that threatened a "painful and strong" response to Hezbollah attacks and warned residents to evacuate three southern suburbs. Other warnings dropped from planes said any trucks on a key northern highway to Syria would be considered targets for attack.

Earlier, missiles from Israeli helicopter gunships blasted the top of a historic lighthouse in central Beirut in an apparent attempt to knock out a broadcast antenna for Lebanese state television.

Top U.N. humanitarian official Jan Egeland criticized Israel and Hezbollah for hindering the delivery of aid to civilians trapped in southern Lebanon, saying it was a "disgrace" they had failed to allow convoys to get through.

Egeland said a plan worked out with Israel, Lebanon and Hezbollah to funnel aid through humanitarian corridors has not worked the way each side had promised.

"The Hezbollah and the Israelis could give us access in a heartbeat," Egeland said at the U.N.'s European headquarters in Geneva. "Then we could help 120,000 people in southern Lebanon.