The army captured two militants from the Hezbollah group in the south Lebanese village of Marun al-Ras, seized by Israel in a major incursion on Saturday, and brought them back to Israel, the military radio said on Monday.
The capture appeared a tit-for-tat response to Hezbollah's kidnapping of two Israeli soldiers on July 12 which started the current crisis and spurred Israel to embark on an offensive to defeat the Shia group.
Meanwhile, Jan Egeland, the UN humanitarian coordinator, made no attempt to hide his fury as he toured bombed-out areas of Beirut.
"This is destruction of block after block of mainly residential areas. I would say it seems to be an excessive use of force in an area with so many citizens," he told reporters in the southern suburbs of Beirut, a Hezbollah stronghold.
Asked if the Israeli raid that destroyed the burned-out buildings before him constituted a war crime, he replied: "It makes it a violation of humanitarian law."
More than 400 people, mostly Lebanese civilians, have been killed in the last 13 days of unrest.
Egeland was in Lebanon to launch an urgent appeal for funds for half a million people made homeless by the conflict. He said $100 million were needed.
Mounting death toll
In other incidents, at least 12 civilians, including a Lebanese press photographer, were killed in new Israeli air strikes across Lebanon.
Layal Najib, a photographer for Al-Jaras magazine, was the first journalist killed in the Israeli campaign in Lebanon.
She was covering the exodus of civilians from Lebanon's embattled south when a missile hit a packed mini-bus, also killing three passengers on board.
Lebanese trying to flee bombings
came under Israeli fire
Streams of people, many waving white flags, are making a desperate trek from southern Lebanon after Israel ordered them to leave their homes, raising fears it is planning a large-scale ground invasion.
Shia guerrillas responded with a new hail of rocket fire on Israel's third city of Haifa, killing one person in his car and a second in a warehouse.
The Israeli military early on Monday fired five shells on the Rashidiyeh Palestinian refugee camp in south Lebanon, wounding six people, in the first such strike in its offensive.
At least 380 Lebanese, mostly civilians, have been killed in Israel's massive reprisals. And Hezbollah rocket and artillery attacks have killed 37 Israelis, among them 19 soldiers.
On the diplomatic front, Condoleezza Rice, the US secretary of state, was to visit Israel on Monday amid mounting calls for a halt to the conflict.
Condoleezza Rice has opposed a
cease-fire as a "false promise"
But Rice has opposed a cease-fire as a "false promise", saying the only way forward is a long-term solution which sees Hezbollah stop rocket attacks into Israel and release the two captured Israeli soldiers.
The top US diplomat, who has also urged Israeli restraint, will meet Ehud Olmert, the Israeli premier, and Mahmud Abbas, the Palestinian president.
On Wednesday, Rice will face angry Lebanese leaders, UN officials and Europeans demanding a cease-fire and Arab allies who reportedly refused to host her visit, dismayed at the US stance.
Before her departure, Rice and George Bush, the US president, received a call for a cease-fire from Prince Saud al-Faisal, the visiting Saudi foreign minister, who was also reported to have proposed concrete plans for a truce.
"We requested a cease-fire to allow for the cessation of hostilities that would allow ... Lebanon to establish sovereignty over the whole of its territory," Prince Saud told reporters after the White House meeting.
Saudi officials said he proposed an "exchange of prisoners" between Hezbollah and Israel, something the Israeli government has ruled out.
More unrest ahead
There has been mounting international criticism of the Israeli offensive, which has left Lebanon virtually cut off from the world, made hundreds of thousands refugees in their own country and destroyed infrastructure worth billions of dollars.
Israeli offensive has left hundreds
of thousands of refugees
But Israel's ambassador to the United States rejected criticism of the military offensive, saying it had dealt a "real blow" to Hezbollah, damaging the group's arsenal and killing a "few hundred" of its fighters.
Daniel Ayalon said the military campaign was "not easy", but Israel was making progress. He added: "And in a few days, you will see a totally different situation."
But in the first openly expressed reservations by an Israeli minister on the success of the offensive, Eitan Cabel, a minister without portfolio said on Sunday: "I admit I had hoped for better from the army."
According to General Udi Adam, the commander of Israel's northern military region, the Israeli offensive will continue for "several weeks".
Syria, blamed by the United States for stoking the conflict, warned that if Israel invaded Lebanon it would have no choice but to respond.
"If Israel makes a land entry into Lebanon, they can get to within 20km of Damascus. What will we do? Stand by with our arms folded? Absolutely not. Without any doubt, Syria will intervene in the conflict"
Mohsen Bilal, Syria's information minister
"If Israel makes a land entry into Lebanon, they can get to within 20 kilometres of Damascus," Moshen Bilal, Syria's information minister, told the Spanish newspaper ABC.
"What will we do? Stand by with our arms folded? Absolutely not. Without any doubt Syria will intervene in the conflict."
The US ambassador to the United Nations, John Bolton, rebuffed a previous Syrian offer of dialogue, saying that "Syria doesn't need dialogue to know what they need to do."
Olmert, whose army is also fighting a second offensive in the Gaza Strip that has left over 100 Palestinians dead, said he would accept a peacekeeping force in Lebanon "made up of troops from European Union countries".
Its mandate "will have to include control of the border crossings between Syria and Lebanon, deployment in south Lebanon and support for the Lebanese army," he said.