Although officials called for an end to the violence, 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."
U.N. Secretary-General Kofi 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.
Meanwhile, Hezbollah inflicted heavy casualties on Israeli troops as they battled for a key hilltop town in southern Lebanon for a fourth day Wednesday, with at least 12 soldiers reported killed. Israel has faced fiercer resistance than expected as it advances across the border in its campaign against the Islamic militant group.
A senior Hezbollah commander reportedly says the guerrilla organization hopes to hit the Israeli city of Netanya with its rockets. CBS News correspondent Dan Raviv reports the city is 40 miles south of Haifa and 60 miles south of the border with Lebanon — and just 17 miles north of Tel Aviv.
In other developments:
Israel was not represented at the Rome conference, which initially was set up only to discuss economic aid for Lebanon.
After listening to a dramatic appeal from Lebanese Prime Minister Fouad Saniora for them to stop the killing, 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.
"There is much work to do and everyone has a role to play," said Rice.
Israel's foreign minister Tzipi Livni said she expects the international community to stand by Israel in stopping Hezbollah rocket attacks.
"We will not do with declarations," Livni said while visiting Haifa. "U.N. Resolution 1559 must be applied, and Hezbollah disarmed and expelled from Lebanon."
And brokering peace now seems 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 CBS News foreign affairs analyst Pamela Falk, "but that is with a Secretary General who has deep reservations about keeping U.N. blue helmets in harm's way."
"The failure of the Rome conference was anticipated, but the killing of the U.N. peacekeepers made it clear that any military force that stands between Israel and Hezbollah forces will be a target of attack and will have to be in for a long haul, making any compromise at the conference impossible," Falk added.
The Israeli military disputed the Al-Arabiya television report of 12 Israeli soldiers killed at Bint Jbail, saying only that several soldiers have been wounded in heavy fighting.
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, reports .
Four U.N. observers, meanwhile, were killed when their bunker was hit by an Israeli air strike and collapsed, reports CBS News correspondent Sharyn Alfonsi.
The Israeli air strike on a U.N. observation post in southern Lebanon that killed four unarmed U.N. observers also is likely to further fuel international demands for an immediate cease-fire.
Annan said the attack late Tuesday was "apparently deliberate" and demanded an investigation. Israeli Prime Minister Ehud Olmert called Annan on Wednesday to express his "deep regret over the mistaken killing," Olmert's office said.
Berger in Haifa reports Israelis are outraged at Annan's charge.
"I assume (Israel's offensive) will continue for several more weeks, and in a number of weeks we will be able to (declare) a victory," Maj. Gen. Udi Adam, the chief of Israel's northern command, said at a news conference Wednesday.
Olmert said Wednesday Israel plans to create a one-mile-wide zone in southern Lebanon free of Hezbollah guerrillas.
He also told a parliament committee Wednesday that Israel will not reoccupy any part of southern Lebanon, participants said, apparently to reassure lawmakers and the public that troops will not return to Lebanon permanently.