The Lebanese government has said that more than 600 people may have been killed so far in Israel's 16-day-old military campaign against Hizbollah fighters.
Israel's inner cabinet chose to pursue a strategy of air strikes and limited ground incursions, rather than a full-scale invasion of Lebanon, to halt Hizbollah rocket fire on its towns.
Military chief Lieutenant-General Dan Halutz said Hizbollah had suffered "huge damage" and added there would be no halt in the offensive. He said he would order up to 15,000 reserve soldiers to report for duty.
US President George W. Bush said he wanted an end to the conflict as soon as possible but that he did not want a "fake peace" that would only delay fighting.
At least 437 people, the majority of them civilians of whom half are believed to be children, have been confirmed dead.
Israeli Justice Minister Haim Ramon
However, Lebanese Health Minister Mohammad Khalifeh said today that as many as two hundred bodies were still buried under rubble.
"On top of those victims, there are 150 to 200 bodies still under the rubble. We have not been able to pull them out because the areas they died in are still under fire," he said.
Fifty-one Israelis, including 18 civilians, have been killed.
Bodies still lie in the streets in some isolated Lebanese border villages, where fighting has trapped terrified civilians, the International Committee of the Red Cross (ICRC) said.
"In every fight, we are sheep for the slaughter," said Hafez Ebeid, 65, who had fled his border village of Marwaheen to the relative safety of Sidon, the biggest city in the south.
The updated casualty figure was announced as Israel continued to pound positions in Lebanon and Hizbollah attacked northern Israel with Katushya rockets.
Radio masts north of Beirut and trucks delivering supplies in eastern Lebanon were hit by Israel, killing three drivers, security sources said. Warplanes and artillery also blasted targets in the south of the country, killing a motorcyclist.
Hizbollah launched 48 rockets at Israel today bringing to over 1,400 the number of rockets fired into Israel since the offensive began.
In other developments today, Israeli Prime Minister Ehud Olmert's security cabinet decided against a major expansion of the ground war today but decided to call up 30,000 troops in order to refresh troops in Lebanon.
The decision by the Israeli Cabinet not to expand the Lebanon offensive came as Israel's Justice minister claimed that world leaders, in failing to call for an immediate cease-fire during a Rome summit, gave Israel a green light to push harder to wipe out the Lebanese guerrillas.
However, the EU said Israeli Justice Minister Haim Ramon's interpretation of the Rome meeting result was "totally wrong," and that Mideast hostilities should stop now.
An Israeli man is treated after being injured in an Hizbollah rocket attack today
Asked by Israeli Army radio whether entire villages should be flattened, Mr Ramon said: "These places are not villages. They are military bases in which Hezbollah people are hiding and from which they are operating."
Thousands of civilians are believed to be trapped in villages across the border region in southern Lebanon, according to humanitarian officials.
Elsewhere, France said today that it was disappointed that an international conference in Rome yesterday had failed to call for an immediate end to hostilities and urged UN Security Council foreign ministers to meet early next week to work on a ceasefire resolution.
US Secretary of State Condoleezza Rice, who visited Beirut and Jerusalem this week, said she would return to the Middle East if she believed she could clinch a lasting peace in Lebanon .
Her comments, made on arrival in Malaysia for a regional security conference, underlined Washington's intention not to press Israel to stop fighting until Hizbollah guerrillas, backed by Iran and Syria, had been significantly weakened.
With anger among Arabs and Muslims mounting over Israel's offensives in Lebanon and the Gaza Strip, a senior al-Qaeda leader released a video in which he declared it would not stand idly by.
"How can we remain silent while watching bombs raining on our people?" asked the group's deputy leader Ayman al-Zawahri.
Apart from the dead, the Lebanese Health Ministry said 1,788 people have been seriously wounded in the fighting.
An ICRC report said one of its delegates had found about 700 people, including 300 children, sheltering in a mosque in Blida, a village near the embattled southern town of Bint Jbeil.
The Lebanon conflict has largely overshadowed separate fighting in the Gaza Strip, which shows no sign of abating.
Israeli attacks killed three people, including a 75-year-old woman, in Gaza on Thursday, medics said, a day after clashes in which 24 Palestinians died. Israel has killed 146 Gazans in a month-long offensive to recover a soldier seized by militants.