Hezbollah rocket attack kills eight in Haifa, Israel

According to Bloomberg, one rocket hit a garage next to the station at about 9:20 a.m. local time, Eli Bin, director-general of Magen David Adom emergency services, told Channel 2 television. Israeli casualties stand at 21. At least 110 Lebanese civilians, three soldiers and two Hezbollah fighters are dead, according to Lebanese police.

"We have no intention of giving in to these threats," Israeli Prime Minister Ehud Olmert said in remarks broadcast at the start of the weekly Cabinet meeting. "Our enemies are trying to disturb daily life. They will fail."

The violence has sent crude oil to a record and contributed to declines in U.S. and European stock markets amid concerns it may widen into a broader conflict. Egypt's stock market fell 10 percent today, the most in eight years. The Middle East provides a third of the world's oil.

Lebanese Prime Minister Fouad Siniora yesterday called for a United Nations-backed cease-fire and for his government to re- establish its authority in the country's south. Hezbollah controls southern Lebanon and staged the kidnapping raid into Israel July 12 that started the conflict. Israel accused Iran of aiding Hezbollah fighters in southern Lebanon.

Israeli Foreign Ministry spokesman Mark Regev said Siniora's failure to implement UN resolutions to disarm Hezbollah had caused the crisis.

"Lebanon is waiting for the world to come in and get involved in this conflict, and to make Hezbollah surrender," said Eyal Zisser, a research fellow at Tel Aviv University's Moshe Dayan Center. For now, Israel has no option but to continue the military offensive in south Lebanon, he said.

The Tel Aviv Stock Exchange fell 2.7 percent to 729.01. The TA-25 benchmark index has tumbled almost 12 percent since the fighting in Lebanon began.

Israel hasn't launched a full-scale military attack on Lebanon or Hezbollah since it pulled its troops out of a swathe of southern Lebanon held for 18 years until May 2000.

Israeli forces today hit two coastal radar stations operated by the Lebanese army, as well as Hezbollah headquarters and a compound that houses the organization's al-Manar television station, an army spokeswoman said, speaking on condition of anonymity. Lebanon's army fired on and missed an Israeli aircraft over the Lebanese coast, she said.

Israel's Channel 2 television said Hezbollah leader Hassan Nasrallah, 45, was wounded in an Israeli attack, without saying where it got the information. Hezbollah denied the report, al- Jazeera TV said, citing an unidentified Hezbollah source.

Three Israeli sailors are missing after a radar-guided missile hit their gunboat, an army spokeswoman said, speaking anonymously in accordance with military rules. The army said a second missile sunk a Cambodian ship with an Egyptian crew.

Laser-guided missiles supplied by Iran struck both vessels, Brigadier General Noam Faig said at a Tel Aviv news conference.

About 100 Iranian Revolutionary Guards are stationed in Lebanon, the Associated Press reported, citing unidentified Israeli officials. The Guards are an armed force that operates parallel to the army and aids militant groups outside Iran, according to the Pentagon's National Defense University.

Hezbollah, regarded as a terrorist organization by the U.S., is supported by Iran and Syria. Almost a fifth of Lebanon's legislature is made up of lawmakers from Hezbollah.

World leaders, including U.K. Prime Minister Tony Blair, Russian President Vladimir Putin and French President Jacques Chirac, have called for Israel to restrain its response to rocket attacks and the capture of its soldiers.

U.S. President George W. Bush stopped short of endorsing a cease-fire called for by Putin, but urged Israeli restraint.

Blair joined Bush today in blaming Iran and Syria for the escalation of violence.

Syria will respond with "firm and direct" action to any Israeli assault, Information Minister Mohsen Bilal was quoted by the state-run Syrian Arab News Agency as saying.

Iranian Foreign Ministry spokesman Hamid Reza Asefi said all Muslim countries should defend Syria and Lebanon against Israel.

The U.S. State Department told American citizens in Lebanon late yesterday that plans were being made to help them leave the country. Stewart Tuttle, a U.S. embassy spokesman in Tel Aviv, said there were no plans to evacuate its citizens from Israel.

No flights to and from Israel have been canceled, said Pnina Ben-Ami, an adviser to the tourism ministry.

Crude oil may rise from a record this week on concern the growing conflict in the Middle East will disrupt shipments from the region, according to a Bloomberg survey of 34 analysts and traders. Oil topped $78 a barrel for the first time July 14.

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