Israel destroyed most of the military positions of Lebanese Hezbollah guerrillas along its northern border in the heaviest fighting since it ended its 18-year occupation of southern Lebanon, an Israeli commander said Monday.

Sunday's rocket and artillery exchanges killed two guerrillas in Lebanon and wounded two Israeli soldiers, two Lebanese civilians and six militants.

An Israeli newspaper, meanwhile, reported that Iran has equipped Hezbollah with rockets capable of hitting all of Israel's major cities, including Beer Sheva in the south. The Haaretz daily, citing intelligence sources, said the rockets have a range of about 125 miles, or double that of weapons previously in Hezbollah's arsenal.

The Israeli commander, Brig. Gen. Gal Hirsch, declined comment on the Haaretz report.

However, he said Iranian weapons in the hands of Hezbollah, including mortars and missiles, pose "a growing threat" to Israel.

Sunday's cross-border fighting began when Katyusha rockets were fired from Lebanon at Israel's northern Galilee region, hitting an air force base, followed by attacks on Israeli outposts along the border.

In response, Israel unleashed its fiercest artillery barrage since withdrawing from Lebanon in 2000.

"Our main effort was to destroy the front line that Hezbollah has built in the last six years," said Hirsch, who commands an Israeli army division along the border.

Hirsch said Hezbollah had established dozens of frontline outposts along the border with Israel.

"We destroyed most of them," the commander said in a telephone interview.

Witnesses in the border region said several Hezbollah outposts were heavily damaged or destroyed by the Israeli shelling and air raids. Those positions are largely observation posts manned by guerrillas carrying light arms. They are different from the hidden, mobile launch sites where Hezbollah fires Katyusha rockets.

Hirsch said the Israeli military was ready for a Hezbollah attack, having prepared a contingency plan. "We were waiting for them for weeks," he said.

The U.N. peacekeeping force in southern Lebanon brokered a cease-fire that took effect Sunday evening, Milos Strugar, a spokesman for the U.N. Interim Force in Lebanon, told The Associated Press.

Tensions along the border rose after a senior official in the violent Palestinian group Islamic Jihad was killed in a car bomb in the southern Lebanese town of Sidon last week. Israel has denied involvement.

President Emile Lahoud blamed Israel for Sunday's fighting and urged the world to intercede "to put an end to Israel's aggressive actions."

But Israel put the onus on Beirut to maintain the peace, saying the Lebanese government was responsible for maintaining order.

Israel has urged the Lebanese government to disarm militias and send regular troops to the south, but the government has refused.

Hirsch said he's seen a strong presence of Iranian Revolutionary Guards in southern Lebanon. "Hezbollah is a wing of the Iranian effort to create a frontline against the West," he said, noting that the Iranians train and supply Hezbollah fighters.

The Israeli commander said that in the event of renewed Katyusha attacks, Israel would again retaliate harshly, and perhaps step up its response.

In Lebanese towns and villages near the border with Israel, people swept up broken glass and reopened their shops and schools Monday. Village squares filled with market stalls and customers, as police surveyed the destruction.

In the southeastern Lebanese village of Sohmor, people prepared to bury one of the slain Hezbollah guerrillas, Youssef Mohammed Alaeddine, 36. The other militant killed was a member of the Popular Front for the Liberation of Palestine-General Command.