Hezbollah captures 2 Israeli soldiers in clashes, sparking Israeli offensive into Lebanon

BEIRUT, Lebanon — Hezbollah militants crossed into Israel on Wednesday and captured two Israeli soldiers. Israel responded in southern Lebanon with warplanes, tanks and gunboats, and said eight of its soldiers had been killed in the violence.

Israeli Prime Minister Ehud Olmert called the soldiers' capture "an act of war," and his Cabinet prepared to approve more military action in Lebanon — a second front in the fight against Islamic militants by Israel, which already is waging an operation to free a captured soldier in the Gaza Strip.

The Israeli army said three soldiers were killed in the initial raid, and four others were killed when their tank went over a land mine in southern Lebanon. An eighth soldier was killed as an Israeli force tried to get to the tank, which was part of a ground invasion aimed at rescuing the captured soldiers.

Olmert said he held the Lebanese government responsible for the two soldiers' safety, vowing that the Israeli response "will be restrained, but very, very, very painful."

Hezbollah leader Sheik Hassan Nasrallah said he will not release the captives except as part of a prisoner swap. He said the two soldiers were "in a safe and very far place."

"No military operation will return them," he told a news conference in Beirut. "The prisoners will not be returned except through one way: indirect negotiations and a trade."

Israeli jets struck deep into southern Lebanon, blasting bridges and Hezbollah positions and killing two civilians, the Lebanese officials said.

The Israeli military planned to call up thousands of reservists, and residents of Israeli towns on the border with Lebanon were ordered to seek cover in underground bomb shelters.

The Israeli stock market plunged on word that two more soldiers were captured and that Israel was getting entangled in a second front against Lebanese guerrillas. The exchange's TA-25 blue chip index sank as much as 4.9 percent in exceptionally heavy trading. It rose slightly in afternoon trading to close down 4.2 percent.

The United States, U.N., European Union, France and Germany expressed deep concern about the fighting. U.N. Secretary-General Kofi Annan called for the immediate release of kidnapped Israeli soldiers and condemned Israel's retaliation in southern Lebanon.

Secretary of State Condoleezza Rice said the Hezbollah action went against the interest of the Lebanese people, and that Syria has a "special responsibility" to resolve the crisis.

"All sides must act with restraint to resolve this incident peacefully and to protect innocent life and civilian infrastructure," she said ahead of meetings in Paris.

Separately, Israel escalated its Gaza assault, killing 23 people.