Foreign ministers at the crisis conference pledged to work urgently for a "lasting, permanent and sustainable" ceasefire, but did not call for the fighting to stop now, as Lebanon and its Arab allies had demanded.
Israel's offensive is by no means over, an Israeli general said. "Given the progress over the last two weeks, I reckon it will continue for several more weeks," Major-General Udi Adam, head of the northern command, told reporters.
US Secretary of State Condoleezza Rice has insisted that no truce can be sought unless the status quo is changed and that there could be "no return to the status quo ante."
"We have to have a plan that will actually create conditions in which we can have a ceasefire that will be sustainable," Ms Rice told a closing news conference in Rome.
The US has backed Israeli demands for Hizbullah to pull back from the border and ultimately disarm. In the latest fighting, Lebanese security sources said guerrillas ambushed an Israeli force advancing on the town of Bint Jbeil, four km (2.5 miles) from the frontier.
Hizbullah sources said the Israeli force was cut off and most of its vehicles were destroyed. "Our men can hear the screams of their wounded calling for help," one source said.
Al Jazeera television said 13 soldiers had been killed. If confirmed, the toll would be the Israeli army's worst one-day loss since it launched its Lebanon offensive two weeks ago.
Several Israeli soldiers were also wounded when Hizbullah guerrillas attacked the nearby border village of Maroun al-Ras, seized by the Israelis in heavy fighting last week, medics said.
In Rome, the ministers agreed a UN-mandated international force was needed to secure the Israel-Lebanon border.
They urged Israel to exercise "utmost restraint" in its assault on Lebanon, launched after Hizbullah captured two Israeli soldiers in a cross-border raid on July 12 th.
In the Gaza Strip, scene of another Israeli offensive, Israeli forces killed 19 Palestinians, including nine militants, three children and a handicapped man, during fighting.
Israel has killed 137 Palestinians in a month-long campaign to recover a captured soldier and stop rocket fire from Gaza.
Its war against Hizbullah has killed at least 419 people in Lebanon, mostly civilians. At least 42 Israelis have also died.
UN Secretary-General Kofi Annan said Iran and Syria, both allies of Hizbullah, should be included in efforts to halt the war. Rice blames Tehran and Damascus for stoking the conflict.
Israel, Iran and Syria were not invited to the Rome talks.
Hours later, more than 125 missiles hit the port of Haifa and other parts of northern Israel, wounding dozens of people.
Israeli Prime Minister Ehud Olmert strove to limit diplomatic damage from the killing of four UN observers in an air strike on their post in south Lebanon on Tuesday, telling Annan he was sorry at the deaths, but expressing shock at the UN chief's suggestion the attack was deliberate.
China condemned the air raid, in which a Chinese observer was killed. The others were from Finland, Austria and Canada.