Nine Israeli soldiers have been killed in fierce clashes with Hezbollah militants in south Lebanon.
The Israelis died in a battle for the town Bint Jbeil
Eight troops died near the town of Bint Jbeil, Israel's biggest loss of life in a single incident so far during its two-week offensive.
In Rome, UN-led crisis talks ended with no agreement to urge an immediate ceasefire between Israel and Hezbollah.
The talks were overshadowed by an outcry after an Israeli missile killed four UN observers on Tuesday.
The eight Israelis were killed early on Wednesday morning as Israeli forces tried to take control of Bint Jbeil, a strategically located town near the border between Lebanon and Israel.
The Israeli army confirmed the deaths on Wednesday evening.
Israel says the town is a Hezbollah stronghold, used by the militants as a launching ground for the barrages of rockets fired daily into northern Israel.
Twenty-two soldiers were injured in the fighting, the Israeli army said.
A military source told the BBC that several soldiers were killed when the Israeli infantry were ambushed near the town shortly before dawn on Wednesday.
More were killed during a rescue operation, which was followed by an intense five-hour firefight.
Later, another Israeli soldier was killed in the border village of Maroun al-Ras, which Israel moved into over the weekend after several days of fighting.
In the southern city of Tyre, a massive explosion destroyed a six-storey building where a local Hezbollah leader was believed to have an apartment.
At least six people were injured, although the building was empty at the time.
Correspondents say Israel has been meeting stronger resistance from Hezbollah than it initially anticipated.
A senior Israel army general said he expected the fighting would continue for "several more weeks".
More than 405 Lebanese and 51 Israelis have died in violence since Hezbollah captured two Israeli soldiers in a cross-border raid on 12 July.
In other developments:
- Israeli forces attack an army base and a radio relay station north of Beirut early on Thursday
- Hezbollah fired more than 150 rockets into Israel, injuring 31 people, security and medical sources say
- Ten lorries loaded with food and medical supplies arrived in the southern town of Tyre from the capital, Beirut.
Details have emerged about the deaths of four unarmed UN observers after an Israeli air strike hit a UN post in south Lebanon on Tuesday.
UN staff had contacted Israeli troops 10 times to ask them to stop firing before a precision missile landed on the building, an initial UN report into the incident said.
Each time the UN contacted Israeli forces, they were assured the firing would stop, the report said.
Israeli Prime Minister Ehud Olmert has expressed "deep regrets" over the deaths.
Israel is conducting an investigation into the incident and has rejected accusations made by UN Secretary General Kofi Annan that the targeting of the UN position was "apparently deliberate".
White House spokesman Tony Snow said there was no reason to suggest the bombing was deliberate.
The UN Security Council discussed the issue, but broke up without agreeing a resolution condemning the attack.
The US objected to the wording in the resolution condemning "any deliberate attack against UN personnel".
The Rome summit, called by US Secretary of State Condoleezza Rice, brought together EU and Arab nations plus the US and Russia, but not Israel, Iran or Syria.
Despite an impassioned warning from Lebanese Prime Minister Fouad Siniora that more people would die if a ceasefire was delayed, the ministers stopped short of calling for an immediate truce.
The UN deaths have provoked an international outcry
In a joint statement, the ministers attending pledged to work "with utmost urgency" for a ceasefire.
But, reflecting the US position, they said a ceasefire "must be lasting, permanent and sustainable".
There was agreement on the need for an international force with a UN mandate for south Lebanon, but no details were given about which countries would provide troops or the rules of engagement.
Ms Rice expressed concern about Syria and Iran's support for Hezbollah.
But Mr Annan said it was important to work with the countries of the region, including Syria and Iran, to find a solution to the crisis.
The BBC's Jonathan Beale says it seems the US got its way in the talks, and Mr Annan and the Arab nations represented at the summit will leave disappointed.