Israeli Forces Kill One in Raid on Palestinian Camp

Israeli's military targeted Lebanon's largest Palestinian refugee camp from the air early Wednesday, killing at least one person and wounding three others.

Lebanese and Palestinian officials said an Israeli gunship shelled the Ein el-Hilweh camp, but Israel's military called the attack an airstrike against a house used by Hezbollah guerrillas. The identities of the casualties weren't immediately known.

This comes after thirteen Lebanese fell victim to Israeli airstrikes in southern Lebanon on Tuesday as diplomats at the United Nations struggled to keep a peace plan from collapsing over Arab demands for an immediate Israeli withdrawal. Lebanon's president offered 15,000 troops to help secure a buffer zone.

The United States and France wrangled Tuesday over ways to allay Lebanon's fears that Israel would win too much from a draft U.N. Security Council cease-fire resolution, as three Arab foreign ministers argued for changes to the text.

In a private meeting, the Americans and French considered two tentative proposals they hoped would both accommodate Lebanon's demands and revive diplomatic efforts to end the Israel-Hezbollah fighting. (Full story)

Israel delcared a no-drive zone in the entire southern region of Lebanon's Litani River — about 20 miles from the border — warning residents that any vehicle on the road would be destroyed. The order left the streets of the region's main city Tyre empty and civilians in villages across the south unable to flee.

Military planners in Jerusalem said they will push even deeper into Lebanon to target rocket sites.

In the rocky hills of southern Lebanon, ground fighting continued in attempts to control key villages and strategic ridges near the Israeli border, including sites used for Hezbollah rocket barrages that have reached deep into Israel in the heaviest Arab-Israeli battles in 24 years.

At least 145 Hezbollah rockets hit northern Israel by midafternoon.

Israeli artillery and airstrikes pounded a broad swath of southern Lebanon from the Mediterranean coast to inland valleys — including many areas in the Hezbollah heartland now under a blanket curfew imposed by Israel to try to choke off arms routes.

CountryWatch: Israel | Lebanon | Syria | Iran

Attempts to draw a cease-fire blueprint came down to a test between a step-by-step proposal backed by Washington and Lebanon's insistence — supported by Arab allies — that nothing can happen before Israeli soldiers leave. In New York, Arab envoys and U.N. Security Council members tried to hammer out a compromise.

Lebanon put its offers on the table: pledging up to 15,000 troops to a possible peacekeeping mission in southern Lebanon and saying Hezbollah's days of running a state within a state would end. The military plan had added significance since it was backed by the two Hezbollah members on Lebanon's Cabinet — apparently showing a willingness for a lasting pact by the Islamic militants and their main sponsors, Iran and Syria.

Lebanese president Faud Saniora on Tuesday praised Hezbollah's resistance, but said it was time for Lebanon to "impose its full control, authority and presence" over the war-weary country.

"There will be no authority, no one in command, no weapons other than those of the Lebanese state," he said on Al-Arabiya television.

However, sources tell FOX News that Saniora secrectly would prefer an international force to work alongside his own troops, but he's unable to publically state that.

Israeli Prime Minister Ehud Olmert called the proposed Lebanese troop deployment "interesting" and said Israel would favor pulling out once it decides Hezbollah is no longer a direct threat.

State Department spokesman Sean McCormack said the Lebanese forces "would need to be supported by international forces." He added: "It certainly is a significant proposal." (Full story )

Israeli warplanes hit buildings in Ghaziyeh, a Shiite town southeast of Sidon, killing 13 people inside just minutes after a funeral procession of 1,500 in nearby streets, hospital officials said. Another 18 people were wounded.

The funeral was for 15 people killed in airstrikes Monday that flattened three buildings.

Earlier, rescuers said they retrieved one body after an airstrike in Rzoum, northeast of Tyre.

Some of the fiercest skirmishes broke out around the village of Bint Jbail, a Hezbollah stronghold that Israeli has tried to capture for weeks. An Israeli solider and 15 Hezbollah guerrillas were killed, the Israeli military said.

Hezbollah TV also reported pre-dawn attacks on Israeli forces near the Mediterranean town of Naqoura, about 2 1/2 miles north of the border. The Israeli military said two reserve soldiers were killed in the area.

The latest casualties brought the number of people killed in Lebanon to at least 670, while the Israeli death toll was 100.

The clashes followed one of the bloodiest days of the four-week conflict. At least three Israeli soldiers and 49 Lebanese died Monday — including 15 in a rocket attack in a Beirut suburb just hours after Arab League foreign ministers wrapped up a crisis meeting that threw their full diplomatic weight behind Lebanon.

It set the baseline demand for the Security Council: a full Israeli withdrawal or no peace deal is possible. The message was given in an emotional address by Saniora and carried to the U.N. by Arab League envoys. (Full story)

Saniora's government voted unanimously to send 15,000 troops to stand between Israel and Hezbollah should a cease-fire take hold and Israeli forces withdraw.

The move was an attempt to show that Lebanon has the will and ability to assert control over its south, where Hezbollah rules with near autonomy bolstered by channels of aid and weapons from Iran and Syria. Lebanon has avoided any attempt to implement a two-year-old U.N. resolution calling for the disarmament of Hezbollah, fearing it could touch off civil unrest.

The coming days should offer signs on whether a cease-fire plan has a chance.

The original proposal, drafted by the United States and France, demanded a "full cessation of hostilities" on both sides and a buffer zone patrolled by Lebanese forces and U.N. troops. But the plan did not specifically call for an Israeli withdrawal. Critics said it would give room for Israeli defensive operations.

The Associated Press and FOX News' James Rosen contributed to this story.

Click here for complete Mideast coverage.