Television footage showed thick, black smoke billowing off the roof of the damaged house in the Haifa area soon after a dozen explosions shook Israel's third-largest city. At least nine other people were wounded in the attack, one seriously, rescue officials said.
"This was a very significant barrage on Haifa ... and this is an opportunity to tell the residents the war is not over. Stay in the secure areas," Haifa Mayor Yona Yahav told Israel's Channel 2 television.
Throughout the morning, rockets pounded northern Israel, with many hitting Haifa and its densely populated suburbs. One hit the house, while another struck a major road, rescue officials said.
A witness, who gave his name as Itai, told Israel Radio that the rocket attack spun cars around on the road.
Israel media also reported that a factory in Haifa was hit and several people inside were injured.
"My whole factory is totally ruined," owner David Tiboni told Israel Television.
With the attack Sunday, a total of 17 people have been killed by Hezbollah rockets fired over the past two weeks and 19 soldiers were killed in fighting in Lebanon.
Speaking before the weekly Cabinet meeting, Prime Minister Ehud Olmert said the government would discuss ways to help the residents of northern Israel, thousands of whom have been living in bomb shelters since the fighting in Lebanon started.
Israeli Defense Minister Amir Peretz said Sunday that the 12-day-old offensive in Lebanon would continue as Israel tries to push Hezbollah guerrillas away from the border.
"We are continuing with the operation, and the goal is to create a situation in which we have as broad a space for diplomatic movement as possible," Peretz said after meeting with German Foreign Minister Frank-Walter Steinmeier. "The goals we set for ourselves will be achieved. We certainly see a combination of a military operation that is fulfilling its role plus broad international activity to complete the process."
The meeting between Steinmeier and Peretz was one of a series of diplomatic meetings here Sunday aimed at ending the offensive in Lebanon. French Foreign Minister Philippe Douste-Blazy was also scheduled to meet with Israeli officials and U.S. Secretary of State Condoleezza Rice was headed to the region as well.
Israeli jets targeted Hezbollah strongholds in a new airstrikes early Sunday, a day after Israel's tanks and bulldozers barreled over the Lebanese border and its forces seized a village from the Hezbollah guerrilla group.
The soldiers battled militants throughout the day Saturday and raided the large village of Maroun al-Ras in several waves before finally taking control, military officials said. Tens of thousands of Lebanese fleeing north packed into the port of Sidon to escape the fighting as the United Nations warned of a growing humanitarian "disaster."
Early Sunday, large explosions shook Beirut as Israeli warplanes again pounded guerrilla targets in the southern suburbs of the Lebanese capital.
After sunrise, Israeli bombs hit a textile factory in the border town of al-Manara, killing one person and injuring two, mayor Ali Rahal told The Associated Press. The death brought the civilian toll in Lebanon to 373.
Missiles also leveled an agricultural compound belonging to Hezbollah in Baalbek, while strikes in hills around the town wounded at least two people, witnesses and media said.
Israel hit inside the southern city of Sidon Sunday for the first time in its campaign, destroying a religious complex linked to Hezbollah and wounding four people. More than 35,000 people streaming north from the heart of the war zone had swamped this southern port city.
In other recent developments:
"Israel's goal is to see the Lebanese army deployed along the border with Israel, but we understand that we are taking about a weak army and that in the midterm period Israel will have to accept a multinational force," he said, according to his office.
The soldiers battled Hezbollah militants throughout the day, and raided the large Lebanese village of Maroun al-Ras in several waves before seizing control, military officials said. Tens of thousands of Lebanese fleeing north packed into the port of Sidon to escape the fighting.
The Palestinian officials said the unilateral cease-fire is aimed at ending an Israeli offensive in the Gaza Strip that began June 28, three days after militants raided an Israeli army post, killing two soldiers and capturing one, 19-year-old Cpl. Gilad Shalit.
More than 100 Palestinians have been killed since then in daily attacks by Israeli warplanes, tanks and artillery in the offensive, and the militants have fired hundreds of homemade rockets at southern Israel.
The agreement was reached in Gaza City following meetings sponsored by Palestinian President Mahmoud Abbas and Prime Minister Ismail Haniyeh aimed at finding a way out of the crisis in Gaza, the officials said. Several Palestinian militant groups attended, including Haniyeh's Hamas and Islamic Jihad, which have been blamed for many of the rocket attacks on southern Israel, the officials said on condition of anonymously because the agreement was reached at a closed meeting.
But three guerrilla groups said no agreement had been reached.
Abu Kosai, a spokesman for the Al Aqsa Brigades, said: "This report is baseless. We are going to continue launching our rockets toward the Zionist communities as long as the aggression continues. As long as the aggression exists, it's our right to respond."
He also said, "We made contacts with all our brothers who are working in the military field who knew nothing about this report and this agreement."
Abu Ahmed, a spokesman for Islamic Jihad, said: "This is a completely false report. Resistance will continue because the aggression exists and rockets are one of the tools we use in this resistance."
Hamas official Osama Muzaini denied knowledge of a cease-fire, saying the militant groups only respond to Israeli attacks.
"Let the enemy stop its attacks on our land," he said.
The Israeli Defense Forces said it had no immediate comment about the reported cease-fire.
In fighting in Gaza on Friday, four people were killed — a Hamas activist and three relatives — in an explosion at his home in Gaza City, hospital officials said. Palestinians said the house was hit by an Israeli tank shell. The Israeli military denied using artillery or tanks.