The Israeli military had disputed an earlier Al-Arabiya television report of 12 Israeli soldiers killed at Bint Jbail, saying only that several soldiers have been wounded in heavy fighting.
At the same time, the chief of Israel's northern command said he didn't expect a quick end to the fighting.
"I assume it will continue for several more weeks, and in a number of weeks we will be able to (declare) a victory," Maj. Gen. Udi Adam said at a news conference Wednesday.
A senior Israeli general told CBS News chief foreign correspondent Lara Logan that key to winning the fight against Hezbollah is to kill the group's leader, Sheik Hassan Nasrallah.
A senior Hezbollah commander reportedly says the guerrilla organization hopes to hit the Israeli city of Netanya with its rockets.
Talks in Rome among senior officials from the United States, Europe and several Arab nations failed, in apparent disagreement over what kind of cease-fire would be urged to end the Israeli-Hezbollah fighting.
In other developments:
Military sources tell the Jerusalem Post some of the fighting in Bint Jbail is hand-to-hand.
Bint Jbail is often called the capital of Hezbollah and is strategic because it controls the high ground.
Several other Israeli casualties were reported in other fighting in the nearby town of Maroun al-Ras.
There are still Americans left in Lebanon, desperate to get out, reports CBS News correspondent Lee Cowan. In one mountain town, U.S. citizens swarmed around cars leaving on a convoy headed for the port city of Tyre, where an evacuation ship was to depart later in the day.
"Please take us with you, please," begged one woman. She was taken along, but others did not fit and were left behind, Cowan reports.
With Israel facing fiercer resistance than expected in its campaign against the Islamic militants, Israeli Prime Minister Ehud Olmert said Israel wants to establish a 1.2 mile-wide strip in south Lebanon that will be free of Hezbollah guerrillas — ruling out a larger occupation.
Meanwhile, four unarmed U.N. observers from Austria, Canada, China and Finland were killed when their bunker was hit by an Israeli air strike and collapsed.
U.N. Secretary-General Kofi Annan said the attack late Tuesday was "apparently deliberate" and demanded an investigation.
"It was not a deliberate attack because Israel will never, and (has) never, targeted U.N. forces," said Tzipi Livni, Israel Foreign Minister at a news conference. "It is not part of our policy. It is not part of our values."
According to details of a preliminary U.N. report on the incident released to The Associated Press, U.N. peacekeepers called the Israeli military 10 times in a six-hour period to ask it to halt its nearby bombing before their observation post was hit. During each phone call, an Israeli official promised to halt the bombing, according to a U.N. official who had seen the preliminary report.
In Rome, officials called for an end to the violence, but U.S. Secretary of State Condoleezza Rice said any cease-fire must be "sustainable" and that there could be "no return to the status quo ante."
Annan said the solution to the Mideast crisis should involve Iran and Syria. He also called for the formation of a multinational force to help Lebanon assert its authority and implement U.N. resolutions that would disarm Hezbollah.
Israel was not represented at the Rome conference, which initially was set up only to discuss economic aid for Lebanon.
At the conference, Lebanese Prime Minister Fouad Saniora made a dramatic plea for someone to stop the killing, reports CBS News chief White House correspondent Jim Axelrod.
"For the past 15 days we are being pounded every day and scores of people are dying every day," he said.
After listening to his appeal, the officials said they had agreed on the need to deploy an international force under the aegis of the United Nations in southern Lebanon.
"Participants expressed their determination to work immediately to reach, with utmost urgency, a cease-fire that puts an end to the current violence and hostilities. The cease-fire must be lasting, permanent and sustainable," Italian Foreign Minister Massimo D'Alema said.
He said many of the participants in the meeting appealed for an immediate and unconditional truce.
The United States and Britain opposed the push for a quick cease-fire, saying any truce should ensure that Hezbollah no longer is a threat to Israel and should ensure a durable peace.
Brokering peace now appears to be up to the United Nations.
"The principal hope for a resolution to the crisis, which clearly must include both a disarming of Hezbollah and a cease-fire if all parties are to sign on, will rest with negotiations of the world powers at the Security Council," said Falk, "but that is with a Secretary General who has deep reservations about keeping U.N. blue helmets in harm's way."