Beirut (Lebanon): Israel's military was searching for four Israeli sailors early on Saturday, who have been missing for over 12 hours after their warship was attacked by Hezbollah off the Lebanese coast, a military spokeswoman told CNN.
The development came as Israel and the Islamic militant group continued to trade attacks in a conflict that threatened to spread throughout the region.
The Israel Defense Forces spokeswoman could not confirm a report in the Haaretz daily that the warship was attacked by an explosives-laden drone, which would have been undetected by radar.
It would be the first time Hezbollah used an unmanned aircraft in an attack against Israel, although it has flown drones over northern Israel.
A Haaretz report said the "drones caused great concern in Israel because they evaded the country's air defenses."
The attack happened about 7:30 p.m. Friday (12:30 p.m. ET) as the warship returned to Israel, the spokeswoman said.
Hezbollah also hit a civilian ship, but there were no casualties reported, she said.
Correcting an earlier report that the warship was towed back to Israel, the IDF spokeswoman said the vessel is operating "on some level" after the fire was extinguished and the damage was fixed.
In an audio-only speech on Hezbollah-run Al Manar television, Hezbollah leader Hassan Nasrallah claimed responsibility for the attack. He also declared "open war" with Israel.
"The surprises that I have promised you will start now," he said. "Now in the middle of the sea - in the middle of the sea facing Beirut - the Israeli warship that has attacked the infrastructure, people's homes and civilians, look at it burning."
"It will sink and with it, will sink tens of Israeli Zionist soldiers. This is just the beginning and until the end, long everlasting peace and a new promise, peace be upon you."
"You wanted an open war," Nasrallah said, "let it be, then, an open war. Your government wanted to change the rules of the game, so let the rules of the game change, then."
"You have chosen an all-out war with a nation that takes pride in its history, civilization and culture, who also has the capability, the experience, the intellect, the wealth, the patience and the courage. The coming days will prove that to you."
It was not clear if the speech was taped or live.
Hezbollah, which enjoys substantial backing from Syria and Iran, is considered a terrorist organization by the United States and Israel.
The group holds 23 of the 128 seats in Lebanon's parliament.
Analysts say the threat of a widened conflict is a real one, given the current harsh rhetoric and longstanding strife between Israel and several Arab nations in the region.
Israeli city Haifa targeted
Nasrallah also vowed to take the war to the Israeli city of Haifa, about 30 miles from the Lebanon border, "and beyond".
Hezbollah rockets hit Haifa on Thursday, prompting a wrathful response from Israel, which bombed Lebanese airports and the southern suburbs of Beirut, a Hezbollah stronghold. But Nasrallah threatened to "stand fast" in the face of Israeli attacks.
"I will not tell you any more - if you hit the suburbs or Beirut, we will hit Haifa," he said. "We are going to an open war, and we are ready for it."
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"We will reach Haifa, and believe me, even beyond Haifa and beyond and beyond Haifa. We will not be the only ones who keep paying the price. Our homes will not be the only ones to be destroyed. Our children will not be the only ones to die."
Israel went after a southern neighborhood of Beirut Friday night, attacking the Hezbollah stronghold where Nasrallah lives.
Al Manar said the building where Nasrallah has an apartment was hit but he and his family were safe. The report could not be independently confirmed.
CNN staffers heard three large explosions coming from the area where the headquarters of Hezbollah and the studios of a Hezbollah radio station are located.
The attack came as the Israeli Cabinet approved a continued military operation aimed at recovering two Israeli soldiers abducted by Hezbollah guerrillas in northern Israel on Wednesday.
Israel also launched fresh attacks on the road leading from Beirut to Damascus.
In response, Hezbollah fired a string of missile barrages at least six towns in northern Israel.
According to rescue services, missiles hit Carmiel, Nahariya, Safed, Hatzor, Meron and Pqui'in. Israeli authorities said a woman and her grandson were killed by a rocket in Meron.
In addition, the Israel Defense Forces said a barrage of Katyusha rockets had hit Kiryat Shmona. Israeli television showed pictures of a rocket hitting a home at Nahariya and reported the occupants were wounded.
Israelis were told stay away from vulnerable areas but the government did not order them into bomb shelters.
Security Council takes no action
The strikes came as Lebanese Prime Minister Fouad Siniora appealed to President George Bush to help curb the Israeli attacks and win a cease-fire.
At the United Nations, Nouhad Mahmoud, a Lebanese Foreign Ministry representative, asked the council to take action and end "Israeli aggression." He said the government of Lebanon was not responsible for abducting the two Israeli soldiers.
He urged the council to "take an immediate clear decision calling for comprehensive immediate cease-fire and lifting of the air and sea blockade imposed upon Lebanon."
"Israeli forces have not shied from targeting innocent civilians, thus violating all human rights, most importantly the right to life," he said.
"Their forces have bombed peaceful villages, bringing homes over the heads of their inhabitants. More than 60 martyrs have fallen to date, mostly civilians. There are hundreds of injured."
Israeli Ambassador Dan Gillerman responded that Israel is acting in self-defense.
He charged Lebanon has been hijacked by Hezbollah terrorists supported by Syria and Iran. Gillerman charged that the two longer-range missiles that were fired from Lebanon and hit Haifa were "made in Iran".
The Security Council took no action on Lebanon's request.
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Bush has called Siniora and expressed his support and understanding for his desire for a cease-fire, officials with the prime minister's office said.
In a telephone conversation with US Secretary of State Condoleezza Rice, Siniora said Rice told him she would exercise the utmost pressure to help achieve a cease-fire, according to the officials.
Siniora also met with ambassadors from the five permanent members of the UN Security Council - China, France, Britain, Russia and the United States - in Beirut, the officials said.
A quickly escalating conflict
The fighting is part of the quickly escalating strife that broke out after Hezbollah fighters abducted the two Israeli soldiers Wednesday in northern Israel and demanded that Israel open direct negotiations on a prisoner exchange.
Israel rejected the demand, held the Lebanese government - of which Hezbollah is a part - responsible for the kidnappings, and launched a military campaign.
A third Israeli soldier is also being held captive in Gaza, where Hamas and other militants have demanded a prisoner swap.
Israel has also refused those demands. Violence in Gaza continued on Friday.
Early in the day, in an unusual deal the United States helped broker, a runway at the Beirut airport was repaired long enough to allow a private plane carrying former Lebanese prime minister Najib Nakati and five planes from Lebanon's national carrier, Middle East Airlines, to take off before Israeli forces bombed the runway again.
As the day wore on, Israel struck the Zahrani power plant south of Beirut, hitting tanks holding fuel to run the plant, the Lebanese army said.
Israeli warships also shelled the airport, striking the runway and a parking lot near the terminal, the Lebanese army said.
In addition to rebombing the airport runway in Beirut, Israel bombed a tunnel leading to the airport, two bridges, a fuel depot near the airport and an electricity station south of Beirut.
The Lebanese port cities of Tripoli, Sidon and Tyre all reported their ports blocked by an Israeli blockade.
Israeli aircraft also bombed the headquarters for the Syrian-backed Popular Front for the Liberation of Palestine in eastern Lebanon, according to Lebanese defense officials.
Along the Israel-Lebanon border, IDF attacked two Hezbollah outposts, a weapons storage facility used by militants and three gas stations south of Sidon.
Death toll mounting
Israeli attacks on Hezbollah positions in southern Lebanon have killed at least 63 Lebanese, including two soldiers, and wounded 167 others since Wednesday, Lebanon's internal security forces told CNN.
Hezbollah attacks on northern Israel have killed four civilians, in addition to the eight soldiers killed on Wednesday in the initial Hezbollah raid and subsequent clashes, the IDF said.
More than 100 Israelis have been wounded in the attacks, IDF said.
The violence has been blamed for surging oil prices and Wall Street has pummeled in the process.
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