Up to 50 people have been killed - more than half of them children - when Israeli missiles struck a southern Lebanese village, flattening houses on top of sleeping residents.
Civil defence workers said up to 50 civilians who had sought refuge in a building that collapsed were killed.
The bodies of at least 27 children were found in the rubble, said Abu Shadi Jradi, a civil defence official at the scene.
At least 10 children's bodies had been pulled out, placed in plastic bags and loaded in ambulances, he said.
An Associated Press reporter saw 20 bodies, wrapped in white sheets, being taken away. The dead included 10 children and several elderly men and women.
The Israeli army said it targeted Qana because rockets have been repeatedly launched from the area on Israel.
"We were attacking launchers that were firing missiles," said Captain Jacob Dallal, an Israeli army spokesman.
He said the army dropped leaflets several days ago telling civilians to leave Qana.
Lebanese Defence Minister Elias Murr disputed allegations that Hezbollah was firing missiles from Qana.
"What do you expect Israel to say? Will it say that it killed 40 children and women?" he told Qatar-based al-Jazeera TV station.
Lebanese Prime Minister Fuad Saniora said the attack reinforced his calls for a ceasefire.
"There is no place at this sad moment for any discussions other than an immediate and unconditional ceasefire as well as international investigation of the Israeli massacres in Lebanon now," he said.
Lebanese security officials said the strike was at 1am local time at Qana, a village in the hills east of the port city of Tyre.
A three-storey building in the village took a direct hit. Hezbollah's al-Manar TV channel said over 50 people, including 21 children, had died.
The dead were old people, women and children from four families who residents said they gather to spend the night on the ground floor where they felt they were safe from the bombardment.
Rescuers aided by villagers were digging by hand to look for casualties. Others were evacuating shell-shocked old people from neighbouring housing.
"We want this to stop," shouted villager Mohammed Ismail. "May God have mercy on the children. They came here to escape the fighting.
"They are hitting children to bring the fighters to their knees," he said.
In April 1996 more than 100 Lebanese civilians were killed at the same village in an Israeli artillery shelling of a UN base. The civilians had sought refuge with the UN to escape Israeli bombardment.
The attack on Qana came as heavy fighting erupted along the border between Hezbollah and the Israeli army.
Hezbollah's al-Manar TV channel said Israeli troops had "infiltrated" a zone known as the Taibeh Project area, some two miles inside Lebanon. It said the Israeli force was a commando unit known as "the Golani Brigade", and that two soldiers had been killed.
The Israeli army said troops were operating in the Taibeh area since early morning, and that only one soldier was moderately wounded.
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