The Jewish state "will not allow the Hezbollah flag to be flown on the borders of Israel," Peretz said, adding that Israel had no intention of waging war against Syria.
The speech came after the Israeli security cabinet decided not to significantly expand the country's Lebanon offensive but ordered the call up of thousands of additional reserve soldiers to support the current campaign.
Lebanon state radio quoted Health Minister Muhammed Jawad Khalifeh as saying up to 600 civilians in Lebanon were believed to have been killed in the fighting, including as many as 200 still buried in the rubble of destroyed buildings. Another 20 Lebanese soldiers were killed in the fighting and Hezbollah said 35 of its fighters were killed.
A total of 33 Israeli soldiers have died in the fighting and 19 civilians were killed in Hezbollah's unyielding rocket attacks on Israel's northern towns, the army said.
Meanwhile, Israeli warplanes pounded roads and suspected Hezbollah facilities in the south and east, as well as a Lebanese army base in the north, while artillery and aircraft barraged the border region where ground fighting continued.
"We cannot just watch these shells as they burn our brothers in Gaza and Lebanon and stand by idly, humiliated," said al-Zawahiri.
"The war with Israel does not depend on cease-fires. ... It is a jihad (holy war) for the sake of God and will last until (our) religion prevails ... from Spain to Iraq," al-Zawahiri said. "We will attack everywhere." (Full story)
Israel launched a military offensive in Gaza after Palestinian Hamas-linked militants there snatched an Israeli soldier on June 25. As that conflict raged, Hezbollah grabbed two soldiers in a July 12 cross-border raid, sparking a massive Israeli assault on the group in Lebanon.
Iranian newspapers reported that Hezbollah leader Sheik Hassan Nasrallah met Thursday with an Iranian envoy in Syria to discuss the ongoing conflict between the militant group and Israel. A Hezbollah spokeman denied the report to FOX News. (Full story)
On Wednesday, a high-level conference of key Mideast players in Rome ended in disagreement, with most European leaders urging an immediate cease-fire, but the U.S. willing to give Israel more time to punish Hezbollah and ensure an international force can move into south Lebanon to keep the peace.
With cease-fire efforts stalemated, U.S. Secretary of State Condoleezza Rice said Thursday that she was prepared to make a second tour of the Middle East to try to hammer out a resolution, but she did not specify when.
"I am more than happy to go back," Rice said, if her efforts can "move toward a sustainable cease-fire that would end the violence." She spoke in Malaysia after attending the Rome conference. Rice held talks in Beirut and Jerusalem earlier in the week. (Full story)
Israeli Prime Minister Ehud Olmert determined that the goals of the offensive are being met, said cabinet members who attanded the meeting.
The ministers said the call up of three additional reserve divisions, comprising thousands of soldiers, was meant to refresh troops in Lebanon. Still, the huge size of the mobilization raised questions about the military's overall strategy.
Israeli Justice Minister Haim Ramon, who is close to Olmert, said Israel interpreted the lack of consensus at Rome as a green light to continue its offensive.
"We received yesterday at the Rome conference permission from the world ... to continue the operation, this war, until Hezbollah won't be located in Lebanon and until it is disarmed," he told Israel Army Radio. "Everyone understands that a victory for Hezbollah is a victory for world terror."
Ramon also said the Israeli air force must bomb villages before ground forces enter, suggesting that this would help prevent Israeli casualties in the future.
Asked whether entire villages should be flattened, he said: "These places are not villages. They are military bases in which Hezbollah people are hiding and from which they are operating."
Thousands of civilians are believed to be trapped in villages across the border region in southern Lebanon, according to humanitarian officials who have toured the region.
On Thursday, the Israeli military's radio in south Lebanon warned that the army "will totally destroy any village from which missiles are fired toward Israel."
The statement, aired on Al-Mashriq radio, also told Lebanese not to use the road from Qleileh — which is near the Mediterranean coast — to Houlah in eastern Lebanon across the border from Israel's Kiryat Shmona.
Jets carried out more than 30 bombing runs in the highland, apple-growing region of Iqlim al-Tuffah, striking empty houses of alleged Hezbollah activists. The strikes caused a number of casualties, but ambulances and civil defense crews were unable to reach the targeted areas because of intense bombardment, security officials and witnesses said.
Other strikes hit the nearby southern market town of Nabatiyeh, wounding at least three people, officials said. A hit on a road in Rayak, a few miles from the Lebanese-Syrian border, wounded two soldiers and a civilian, the officials said, speaking on condition of anonymity because they were not authorized to make statements to the media.
Despite the Israeli offensive, the guerrillas managed to shoot 110 rockets into Israel on Thursday, lightly wounding 20 people and bringing the total of rockets launched to 1,564.
The Associated Press contributed to this report.