Israeli missiles struck this southern Lebanese village early Sunday, flattening houses on top of sleeping residents. Civil defense workers said up to 50 civilians who had sought refuge in a building that collapsed were killed.

Salam Dayer, a civil defense official at the scene, said between 40 and 50 people were killed.

An Associated Press reporter saw 20 bodies, wrapped in white sheets, being taken away. The dead included 10 children, several old men and women.

CountryWatch: Israel | Lebanon | Syria | Iran

The Israeli army said it targeted Qana because rockets have been repeatedly launched from the area on Israel. "We were attacking launchers that were firing missiles," said Capt. Jacob Dallal, an Israeli army spokesman.

He said the army dropped leaflets several days ago telling civilians to leave Qana.

Lebanese Defense Minister Elias Murr disputed allegations that Hezbollah was firing missiles from Qana.

"What do you expect Israel to say? Will it say that it killed 40 children and women?" he told Qatar-based al-Jazeera TV station.

Lebanese security officials said the strike was at 1 a.m. at Qana, a village in the hills east of the port city of Tyre.

In April 1996 more than 100 Lebanese civilians were killed at the same village in an Israeli artillery shelling of a U.N. base. The civilians had sought refuge with the U.N. to escape Israeli bombardment.

The attack on Qana came as heavy fighting erupted Sunday along the border between Hezbollah and the Israeli army.

Hezbollah's al-Manar TV channel said Israeli troops had "infiltrated" a zone known as the Taibeh Project area, some three or four kilometers (1.8 to 2.5 miles) inside Lebanon. It said the Israeli force was a commando unit known as "the Golani Brigade," and that two soldiers had been killed. The Israeli army said one soldier was moderately wounded in the fighting with Hezbollah.

In Qana, a three-story building took a direct hit on the residential edge of the village. Hezbollah's al-Manar TV channel said over 50 people, including 21 children, had died.

The dead were old people, women and children from four families who residents said they gather to spend the night at a ground floor where they felt they were safe from the bombardment.

Rescuers aided by villagers were digging by hand to look for casualties. Others were evacuating shell-shocked old people from neighboring housing.

"We want this to stop," shouted villager Mohammed Ismail. "May God have mercy on the children. They came here to escape the fighting."

"They are hitting children to bring the fighters to their knees," said the black-haired man with a gray beard, his brown pants covered in dust.

Arab TV stations broadcast live pictures of the rescue effort including three dead children being carried away.

Along the border, several Hezbollah-held sectors were pounded overnight by the Israeli army, witnesses said.

Lebanese officials said Saturday that Israeli troops had massed on the sector of the border where Israeli troops were reported to have entered Lebanon. That area was about 20 kilometers to the northeast of the town of Bint Jbail, from which Israeli troops pulled out on Saturday after a week of fierce clashes.

Al-Manar also broadcast a communique from Hezbollah saying it had shelled Israeli outposts along the border.

The Israeli army said Katyushas rockets were falling in Nahariya, Kiryat Shemona and an area close to Maalot. It said the rockets mostly fell in open areas, and that no injuries were reported.

Click here for more Mideast coverage.