Prime Minister Ehud Olmert expressed "deep regret" Wednesday over the killing of at least three U.N. peacekeepers in an Israeli airstrike in south Lebanon.

Olmert spoke by phone Wednesday to U.N. Secretary General Kofi Annan, who had termed the airstrike as "apparently deliberate."

Olmert said the peacekeepers were killed mistakenly and expressed dismay over Annan's accusation, according to a statement by Olmert's office. The prime minister promised a thorough investigation and said the results would be presented to Annan.

An Israeli bomb destroyed a U.N. observer post on the border in southern Lebanon, killing two peacekeepers and leaving two others feared dead in what appeared to be a deliberate strike, Annan said.

The bomb made a direct hit on the building and shelter of the observer post in the town of Khiyam near the eastern end of the border with Israel, said Milos Struger, spokesman for the U.N. peacekeeping force in Lebanon known as UNIFIL.

Annan issued a statement saying two U.N. military observers were killed with two more feared dead. Earlier, U.S. Ambassador John Bolton said the Security Council was informed that four officers were killed, but he had no other information.

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Rescue workers were trying to clear the rubble, but Israeli firing "continued even during the rescue operation," Struger said.

As reports of the attack emerged, Annan rushed out of a hotel in Rome following a dinner with U.S. Secretary of State Condoleezza Rice and Lebanese Prime Minister Fuad Saniora.

"I am shocked and deeply distressed by the apparently deliberate targeting by Israeli Defence Forces of a U.N. Observer post in southern Lebanon," Annan said in the statement.

Annan said in his statement that the post had been there for a long time and was marked clearly, and was hit despite assurances from Prime Minister Ehud Olmert that U.N. positions would not be attacked.

"I call on the goverment of Israel to conduct a full investigation into this very disturbing incident and demand that any further attack on U.N. positions and personnel must stop," Annan said in the statement.

U.N. officials said four observers were in the post when the bomb hit, and the building had been destroyed. Two bodies had been recovered and two were unaccounted for, apparently still in the rubble. They spoke on condition of anonymity because of the sensitivity of the issue.

One of the dead was identified as Chinese U.N. observer Du Zhaoyu, China's official Xinhua News Agency reported. The other three were from Austria, Canada and Finland but it wasn't clear which two were confirmed killed, U.N. and Lebanese military officials said.

Since Israel launched a massive military offensive against Lebanon and Hezbollah guerrillas July 12, an international civilian employee working with UNIFIL and his wife have been killed in the crossfire between Israeli forces and Hezbollah guerrillas in the southern port city of Tyre.

Five UNIFIL soldiers and one military observer have also been wounded, Struger said.

Also on Tuesday, Israeli Defense Forces said it killed a senior Hezbollah leader during a firefight in south Lebanon.

IDF officials said Abu Jaffar, the head of the Central Area for Hezbollah in south Lebanon, was killed by Israeli troops during a shootout in the Lebanese village of Maroun al-Ras.

Meanwhile, a senior Israeli Foreign Ministry official told FOX News that the United States has given the IDF between 10 and 14 days to finish dealing Hezbollah "a strategic blow."

Both sides traded fierce rocket and artillery volleys across the Lebanon-Israel border Tuesday.

While admitting that the IDF is working at a "slow pace," the Israeli official, who insisted on anonymity, said the timetable was constructed out of concern for human life.

"We could do it much faster if we would be willing to inflict high civilian casualties," the official said. "The decision was made to move in a methodical, slow way."

Israeli troops sealed off a Hezbollah stronghold and warplanes killed six people in a market city in southern Lebanon on Tuesday, while Beirut was pounded by new airstrikes. Guerrillas fired rockets at northern Israel, killing a girl, as the two-week-old crisis showed no signs of letting up, despite frantic diplomatic efforts.

Journalists covering the conflict were warned Tuesday by Hezbollah in Tyre, Lebanon, not to tape or broadcast live the source of outgoing rocket attacks, for fear of having guerrilla positions discovered by Israeli forces.

A second senior official told FOX News the IDF would need "another 10 days or so" to finish the job against Hezbollah. He continued to say that the U.S., European nations and moderate Arab nations that Israel is "doing the dirty job" for everyone in its attacks on Hezbollah."

At least four heavy blasts were heard in Beirut, the first Israeli strikes in the city in nearly two days. A gray cloud rose from the capital's southern district, a Hezbollah stronghold that has been heavily bombarded. Nearly daily pounding halted during Secretary of State Condoleezza Rice's visit Monday.

Al-Jazeera television said 20 Israeli rockets hit the Dahiyah neighborhood. The Israeli army said it hit 10 buildings housing Hezbollah personnel but did not elaborate.

Outlining the scope of the Israeli campaign for the first time, a senior army commander said Israel would only encircle Lebanese towns and villages near the border and did not plan a deeper push into the country.

"The intention is to deal with the Hezbollah infrastructure that is within reach," Col. Hemi Livni, who commands troops in the western sector of southern Lebanon, told Israel Army Radio. "That means in southern Lebanon, not going beyond that."

President Bush expressed concern for the civilians killed and harmed by Israeli bombs, but stopped short of calling for an immediate cease-fire that might not last.

"I support a sustainable cease-fire that will bring about an end to violence," Bush said.

Rice, in Israel on the second leg of a Middle East tour, maintained the Bush administration's position that a cease-fire must come with conditions that make an enduring peace for the region.

"I have no doubt there are those who wish to strangle a democratic and sovereign Lebanon in its crib," Rice said before meeting with Israeli Prime Minister Ehud Olmert in Jerusalem. "We, of course, also urgently want to end the violence." (Full story)

The violence looked likely to drag on with tough ground fighting as Israeli forces try to move village to village near the border, facing well-armed, determined Islamic militant guerrillas who have been digging in for years.

The U.S., which is pushing for the deployment of international and Lebanese troops in southern Lebanon to stop Hezbollah attacks on Israel, has angered many allies with its support of Israel and resistance to calls for an immediate cease-fire to the hostilities that began on July 12. On that day, Hezbollah militants captured two Israeli soldiers and killed three others in a raid on Israel's northern border.

Arabs will insist on an immediate cease-fire and for the Lebanese government to take control over the militant Hezbollah at an international meeting to be held in Rome on Wednesday, Jordanian Foreign Minister Abdul-Illah al-Khatib said.

Iranian President Mahmoud Ahmadinejad, whose nation is a major backer of Hezbollah and a sworn enemy of Israel, said the fighting could trigger "a hurricane" of broader fighting in the Middle East. (Full story)

German Defense Minister Franz Josef Jung said a cease-fire must be in place before any international troops are sent to Lebanon. Israel has suggested it would accept an international force — preferably from NATO — to ensure the peace in southern Lebanon, but Jung said after meeting his French and Polish counterparts that it was too early to say if the alliance, or a European Union force, could be put in place.

A top Hamas official in Syria said Israeli soldiers held by Hamas and Hezbollah will only be released as part of a prisoner swap.

The official, Mohammad Nazal, also raised the possibility of teaming up with Hezbollah to negotiate terms that would lead to the release of Palestinian and Lebanese prisoners in Israel in exchange for the three Israeli soldiers — two held by Hezbollah and one by Hamas.

About 300 Americans and 100 Russians, meanwhile, were feared stranded in the heart of Lebanon's war zone after a ship evacuating foreign nationals from the area left the hard-hit southern port of Tyre on Monday evening. U.S. officials also said the last scheduled evacuations of Americans from Lebanon would happen Wednesday. (Full story)

At the front Tuesday, an Israeli military official said troops had surrounded Bint Jbail, a town that has symbolic importance to Hezbollah as one of the centers of resistance to the Israeli occupation 1982-2000.

Israeli forces have seized some houses on the outskirts of the hilltop town since beginning the assault Monday, but do not yet control Bint Jbail, the official said, speaking on condition of anonymity as a press statement had not been issued.

Up to 200 Hezbollah guerrillas are believed to be defending the town, which lies about 2 1/2 miles north of the Israeli border. Hezbollah's Al-Manar TV reported the fighters were mounting a strong defense against elite Israeli troops who were trying to advance under "heavy bombardment."

In a pre-dawn raid, Israeli warplanes destroyed two neighboring houses in Nabatiyeh, which lies 16 miles north of Bint Jbail and has been heavily bombarded in the past few days.

In one house, a man and his wife and their son were killed, said the couple's daughter, Shireen Hamza, who survived. Three men died in the other house, she said.

While buried under the rubble for 15 minutes, "I just kept screaming, telling my parents to stay alive until help comes," she said. "My father kept saying to me in a weak voice, 'Shireen, stay awake. Don't sleep."'

Security officials said seven people were killed in the blast. But Nabatiyeh Hospital received six bodies from the strike, said Dr. Marwan Ghandour.

At least 70 rockets were fired at northern Israel, and a teenage girl was killed and three other people were injured in the Arab town of Maghar.

One rocket fired at the Israeli port city of Haifa hit a bus, another hit a house and two reportedly struck close to a hospital, injuring five people, witnesses and doctors said. One man died of a heart attack while running to a bomb shelter, Israel Radio said.

Rockets also hit the towns of Kiryat Shemona, Nahariya, Tiberias, Acre and Safed.

Israeli Brig. Gen. Udi Nehushtan also said Israel has destroyed 100-150 rocket launchers, adding that he couldn't say how many of Hezbollah's approximately 12,000 rockets have been destroyed. He also said "dozens" of Hezbollah fighters have been killed.

Mahmoud Komati, the deputy chief of the Hezbollah politburo, told The Associated Press that 25 of its fighters had been killed as of Monday, and the group said two more died in ground fighting Tuesday — raising the previously announced toll of 11.

Despite estimates of the number of Hezbollah militants that Israel claims were killed and the number that Hezbollah asserts were killed, there was no way to accurately determine the number or often distinguish between civilians and fighters.

The Lebanese Health Ministry said 369 civilians have been killed, not including the six people who died in Tuesday's airstrike. Twenty soldiers also have died in the fighting, and the 27 reported Hezbollah deaths brought the total to 422. The increase was due to wounded who died in the hospital.

Israel's death toll stands at 42, including 24 soldiers and 18 civilians, most killed by hundreds of rockets fired by Hezbollah.

Humanitarian efforts continued, and Olmert said Israel will allow the opening of safe passages for transporting aid to all areas of Lebanon.

FOX News' James Rosen and the Associated Press contributed to this report.