Israeli troops and armored vehicles began a massive push toward the Lebanon border late Wednesday, marking the start of a new ground offensive aimed at neutralizing Hezbollah's rocket-launching capabilities, FOX News has learned.

Israel also launched an airstrike on Lebanon's largest Palestinian refugee camp, killing at least two people. The camp is home to about 75,000 Palestinian refugees and their descendants who were displaced by the 1948 Arab-Israeli war.

Bodies of Iranian Revolutionary Guard soldiers were found alongside the Hezbollah dead, Israeli media reported. The Israeli Defense Forces could not confirm the report. Israel has repeatedly said that Iran is aiding Hezbollah terrorists and supplying them with weapons. Iran has denied the charges.

CountryWatch: Israel | Lebanon | Syria | Iran

The moves came as military officials announced early Thursday that 15 Israeli soldiers were killed and 38 wounded in fighting Wednesday, the bloodiest day for Israeli Defense Forces in the month-long campaign against Hezbollah.

The new ground assault was approved by Israel's Security Cabinet in hopes of scoring quick battlefield victories before a cease-fire is imposed.

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Israeli officials said their new offensive was meant to run parallel to the cease-fire talks.

"Israel is still working for a diplomatic solution, preferably in the Security Council," said Isaac Herzog, a member of Israel's Security Cabinet. "We cannot wait forever, we have a million civilians living in bomb shelters, and we have to protect them."

Other officials said privately that the offensive was aimed at pushing the Security Council to take fast action, as well as to clear Hezbollah from south Lebanon.

"The Israeli decision today is taken in absence of concrete steps by the international community to deal with the situation in Lebanon. Such steps would of course make an Israeli military operation superfluous," Foreign Ministry spokesman Mark Regev said. "Israel understands fully that the real solution is diplomatic

A minister who spoke on condition of anonymity because he was not authorized to give details, said the offensive would not begin for two or three days so as not interfere with efforts to broker a cease-fire at the United Nations. However, senior military officials had said it would start far quicker than that.

Soon after the Cabinet decision, a column of Israeli tanks and armored vehicles crossed into southern Lebanon and took up positions.

The move came as fierce fighting was reported overnight with Hezbollah militants, and Arab broadcaster Al-Jazeera reported 11 Israeli soldiers had been killed in what would be the deadliest day for Israeli troops in Lebanon in four weeks of fighting.

Hezbollah leader Sheik Hassan Nasrallah retaliated by warning all Arabs to leave the Israeli port city of Haifa so the guerrilla organization could step up attacks without fear of shedding the blood of fellow Muslims.

"I have a special message to the Arabs of Haifa, to your martyrs and to your wounded. I call you to leave this city. I hope you do this. ... Please leave so we don't shed your blood, which is our blood," he said in a taped television address carried on virtually all major television channels in the region. (Full story)

At least four missiles fired from Israeli ships slammed into Beirut's southern suburbs as Israel continued its sporadic attacks on Shiite neighborhoods and Hezbollah strongholds, police said. Smoke and dust rising over several square blocks.

The Israeli Security Cabinet's decision — approved 9-0, with three abstentions — was risky. Israel could set itself up for new criticism that it is sabotaging diplomatic efforts, particularly after Lebanon offered to deploy its own troops in the border area.

A wider ground offensive also might do little to stop Hezbollah rocket fire on Israel, while sharply increasing the already-high number of casualties among Israeli troops.

Since the fighting began, at least 700 people have died on the Lebanese side. The Israeli toll stood at 103 killed — including 36 civilians.

In the six-hour meeting, Cabinet officials were told a new offensive could mean 100 to 200 more military deaths, a participant said on condition of anonymity because he was not authorized to brief reporters. So far, at least 65 Israeli soldiers have been confirmed killed.

Secretary of State Condoleezza Rice and Prime Minister Ehud Olmert spoke by telephone for a half-hour during the meeting, Israeli officials said. Olmert told the ministers the offensive will be accompanied by a diplomatic initiative, based on a U.S.-French truce proposal that would take Lebanon's concerns into account, a participant in the meeting said.

Under the army's plan, troops would push to Lebanon's Litani River, about 18 miles from the border. Olmert and Defense Minister Amir Peretz will decide on the timing of the new push, said Trade Minister Eli Yishai, a member of the Security Cabinet.

"The assessment is it will last 30 days," Yishai said afterward. "I think it is wrong to make this assessment. I think it will take a lot longer," added Yishai, who had abstained in the vote.

The offensive won't require a new call-up of reserves, Cabinet officials said. The government approved a call-up of some 30,000 reservists earlier this month.

More than 10,000 troops are in Lebanon, many of them regular soldiers. They are fighting in a four-mile stretch, and have encountered fierce resistance from Hezbollah.

The 12-member Security Cabinet's approval of a wider offensive came a day after the commander of Israeli forces in Lebanon was sidelined in an unusual midwar shake-up — another sign of the growing dissatisfaction with the military, which has been unable to stop Hezbollah's rocket barrages.

The army denied it was dissatisfied with Maj. Gen. Udi Adam, but military commentators said the commander was seen as too slow and cautious. The deputy chief of staff, Maj. Gen. Moshe Kaplinsky, was appointed to oversee the Lebanon fighting.

The Israeli military has declared a no-drive zone south of the Litani and threatened to blast any moving vehicles. Country roads and highways were deserted. In the Lebanese coastal city of Tyre, only pedestrians ventured into the streets.

The Al-Jazeera report said 11 Israeli soldiers were killed in heavy fighting with Hezbollah guerrillas near the border. The Israeli army declined to comment on the report but had said earlier that 15 soldiers were wounded in overnight clashes.

A Hezbollah statement said it killed or wounded 10 Israeli soldiers and destroyed a tank as it advanced toward the village of Qantara, north of the border.

The column of Israeli tanks and armored vehicles crossed into Lebanon from the Israeli town of Metulla under covering artillery fire and airstrikes, witnesses in the village of Bourj al-Mulouk said. The Israelis destroyed several houses as they advanced, the witnesses said, on condition of anonymity because they feared reprisals, and took positions about three miles inside Lebanese territory on a hill across from the tip of the northernmost end of the Galilee panhandle.

Airstrikes also leveled a building in the Bekaa Valley town of Mashghara, trapping seven family members in the rubble. Five bodies were pulled out and the remaining two relatives were feared dead, officials said.

Israeli warplanes dropped leaflets over Tyre and Beirut that criticized Hezbollah leader Sheik Hassan Nasrallah, saying he was "playing with fire" and that the Lebanese people were "paying the price."

At least 19 Lebanese civilians were killed Tuesday in Israeli airstrikes. Rescuers pulled 28 additional bodies from the wreckage, raising the death toll to 77 Lebanese killed Monday, the highest since the war began. The death toll in an Israeli airstrike on a Shiite neighborhood in south Beirut on Monday rose to 41, with 61 wounded, Lebanese security officials said.

Hezbollah fired more than 160 rockets at Israel on Wednesday. Since the fighting began July 12, a total of 3,333 have been fired at Israel, officials said.

Diplomatic efforts moved slowly. Israel is skeptical of a Lebanese proposal to dispatch 15,000 soldiers to south Lebanon after a cease-fire and the withdrawal of Israeli forces.

"We will not agree to a situation in which the diplomatic solution will not promise us stability and quiet for many years," Peretz told visiting German Foreign Minister Frank-Walter Steinmeier.

Lebanon's proposal to deploy troops on the border appeared to have taken Israel by surprise.

Israel has long demanded a deployment of Lebanese forces in the border area, but only coupled with a serious effort by Lebanon to disarm Hezbollah. Israel believes Lebanese forces are not strong or determined enough to do the job alone, and would like to see a multinational force in the area, as well.

Assistant Secretary of State David Welch made an unexpected visit to Beirut and held talks with Prime Minister Fuad Saniora, who said afterward no progress was made to end the fighting.

Saniora has praised Hezbollah's resistance, but said it was time for Lebanon to "impose its full control, authority and presence" nationwide — as directed in previous U.N. resolutions that also called for the government to disarm Hezbollah.

State Department spokesman Sean McCormack said the Lebanese proposal was significant, but President Bush warned against leaving a vacuum into which Hezbollah and its sponsors are able to move more weapons.

While Bush said a U.N. resolution was needed quickly, the Security Council put off voting on a U.S.-French cease-fire proposal for at least a day. The delay was to allow three Arab envoys to present arguments that the resolution was heavily tilted in favor of Israel and did not "take Lebanon's interest and stability into account."

Both the U.S. and French envoys to the U.N. indicated there might be room for limited compromise.

"Obviously we want to hear from the Arab League ... and then we'll decide where to go from there," U.S. Ambassador John Bolton said.

French U.N. Ambassador Jean-Marc de La Sabliere promised to take Lebanon's stance into account.

French President Jacques Chirac appealed to Washington to speed up its response to Arab nations' demands for changes to a resolution, saying that giving up the push for an immediate cease-fire would be the "most immoral" response.

FOX News' Bill Hemmer and the Associated Press contributed to this report

Complete coverage of the Mideast Meltdown is available in FOXNews.com's Mideast Center.