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Beirut – Pitched battles raged between Israeli forces and Hezbollah fighters on the border Thursday. Israel resumed its air attacks this morning and warned hundreds of thousands of people to flee southern Lebanon “immediately,” preparing for a likely ground offensive to set up a buffer zone.

U.N. Secretary-General Kofi Annan warned of a humanitarian crisis in Lebanon and called for an immediate cease-fire, even as “serious obstacles” stand in the way of even easing the violence.

Annan denounced Israel for “excessive use of force” and Hezbollah for holding “an entire nation hostage” with its rocket attacks and snatching of two Israeli soldiers last week.

Lebanese streamed north into the capital and other regions, crowding into schools, relatives’ homes or hotels. Taxi drivers in the south were charging up to $400 per person for rides to Beirut – more than 40 times the usual price. In remote villages of the south, cut off by strikes, residents made their way out over the mountains on foot.

The price of food, medical supplies and gasoline rose by as much as 500 percent in parts of Lebanon as Israel’s bombardment destroyed roads, bridges and other supply routes.

On a day that saw U.S. Marines return to Lebanon for the first time in 22 years, the war looked ready to expand dramatically. Neither side showed any sign of backing down.

Israeli planes resumed attacks on Beirut at daybreak today, witnesses said. One loud explosion was heard in the capital. Israeli aircraft also targeted Nabi Sheet in the eastern Bekaa valley, witnesses and Hezbollah’s al-Manar TV said. There were no reports of casualties.

Hezbollah refused to release the Israeli soldiers without a prisoner exchange, and Israel was planning a buffer zone in a region that saw 18 years of Israeli presence end in 2000.

Israel has decided air power alone will not be enough to drive the Shiite militants of Hezbollah back from the Israeli-Lebanon border and that a ground force will be needed to establish a zone that is at least 20 miles deep, senior military officials said Thursday.

But mounting civilian casualties and the displacement of thousands of people could limit the amount of time Israel has to achieve its goals, as international tolerance for the bloodshed and destruction runs out.

Hezbollah leader Sheik Hassan Nasrallah shrugged off concerns of a stepped-up Israeli onslaught, vowing never to release the two Israeli soldiers captured by his guerrillas even “if the whole universe comes (against us).” He said they would be freed only as part of a prisoner exchange.

He spoke in an interview with al-Jazeera news network taped Thursday to show he had survived a heavy airstrike in south Beirut that Israel said targeted a Hezbollah bunker. The guerrillas said the strike hit a mosque under construction and that no one was hurt.

The United States, which has resisted calls to press its ally Israel to halt the fighting, was sending Secretary of State Condoleezza Rice to the region. She will arrive in Israel on Tuesday or Wednesday after stopping in Arab nations, Israeli officials said. They spoke on condition of anonymity because the schedule was not yet confirmed. The mission would be the first U.S. diplomatic effort on the ground since the Israeli onslaught against Lebanon began last week.

Lebanese Prime Minister Fouad Siniora said more than 55 bridges across the country had been destroyed and that Israeli forces had targeted ambulances and medical convoys.

“This attack is no longer against Hezbollah, it is an attack against the Lebanese and Lebanon,” Siniora told CNN.

The U.N. estimated that about 500,000 people have been displaced in Lebanon, with 130,000 fleeing to Syria and about 45,000 believed to be in need of assistance.

Thursday’s developments

  • Israeli troops crossed into Lebanon to seek tunnels and weapons for a second straight day, meeting fierce resistance from Hezbollah guerrillas.
  • U.S. Marines landed in Beirut for the first time in more than 20 years to help evacuate Americans from Lebanon.
  • Israeli officials suggested that Israeli ground troops may take a more active role in combating the Hezbollah militia. “All our options are open,” an Israeli army spokesman said.
  • U.N. Secretary-General Kofi Annan condemned Israel’s “excessive use of force” and denounced Hezbollah for holding “an entire nation hostage”
  • U.S. Secretary of State Condoleezza Rice is arranging a trip that could have her visiting the region as early as Sunday.
  • One day after a Hezbollah bunker was bombed, leader Sheik Hassan Nasrallah appeared on al-Jazeera and said the group’s leadership is intact.
  • Official reports said at least 330 people have been killed in Lebanon and 32 Israelis since the fighting started.
  • The first American evacuees to leave Lebanon arrived at a Baltimore-area airport.

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