Israeli troops continued to hold a Lebanese border village that they battled into on Saturday, but did not appear to be advancing, Lebanese security officials said. Its warplanes and artillery, meanwhile, battered areas across the south.

In talking about a cease-fire, Damascus warned that it will not stand by if the Israelis step up their offensive in Lebanon.

"Syria and Spain are working to achieve a cease-fire, a prisoners’ swap and to start a peace process as one package," Syrian Information Minister Mohsen Bilal was quoted as saying by the Spanish daily newspaper ABC.

Bilal said Damascus would cooperate only within a broader peace initiative that would include a return of the Golan Heights, captured by Israel in 1967.

Asked about the comments from Syria, U.S. Ambassador to the United Nations. John Bolton said, "It’s hard to see."

"Syria doesn’t need dialogue to know what they need to do," Bolton told "Fox News Sunday." "They need to lean on Hezbollah to get them to release the two captured Israeli soldiers and stop the launch of rockets against innocent Israeli civilians.

Israeli Defense Minister Amir Peretz told the Cabinet that the current offensive is not an invasion of Lebanon, but rather a series of limited raids. He also said that Israel would accept a temporary international force, preferably headed by NATO, deployed along the Lebanese border to keep Hezbollah guerrillas away from Israel, according to officials in his office.

Asked about such an international force, Lebanese Prime Minister Fuad Saniora told CNN "it’s very early to talk about this matter."

Israel hit the southern port of Sidon for the first time, 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 the city, which is teetering under the weight of refugees.

Israel also bombed a textile factory in the border town of al-Manara, killing one person and wounding two, Mayor Ali Rahal told The Associated Press.

The stricken minibus was carrying 16 people fleeing the village of Tairi, heading through the mountains for the southern port city of Tyre. A missile hit the bus near the village of Yaatar, killing three and wounding the rest, security officials said.

On Saturday, the Israeli military told residents to evacuate Taire and 12 other nearby villages.

An 8-year-old boy was killed in a strike on a village in the mountains above Tyre, and another missile hit a vehicle outside the Najem hospital, wounding eight, a hospital official said.

Hezbollah said three of its guerrillas were killed in fighting.

At least four other people were killed by strikes in the south, Lebanese TV said, but the deaths were not confirmed by security officials. About 45 people were wounded in Israeli air raids that targeted villages and towns around Tyre, security and hospital officials said.

The deaths brought to at least 380 the official death toll provided by Lebanese authorities. Israel’s death toll stands at 36, with 17 people killed by Hezbollah rockets and 19 soldiers killed in fighting.

Saniora told CNN that one-third of the dead are under age 12.

A photographer working for a Lebanese magazine was killed when an Israeli missile exploded near her taxi, security officials said on condition of anonymity because they were not authorized to speak to the media. Layal Nejim, 23, worked for the Lebanese magazine Al-Jaras, the officials said. Her driver survived.

A U.N. observer was wounded by Hezbollah gunfire during fighting with Israeli troops in south Lebanon, said U.N. spokesman Milos Strugar. The Italian chiefs of staff office identified the wounded U.N. official as Italian Capt. Roberto Punzo, adding he was flown by helicopter to a hospital in Haifa and that his life was not in danger.

He was the second member of the U.N. monitoring team injured in the fighting.

Israeli warplanes and helicopters bombed Nabi Sheet, near the eastern Bekaa Valley town of Baalbek, wounding five people, witnesses said. Strikes in Baalbek leveled an agricultural compound belonging to Hezbollah and also targeted a factory producing prefabricated houses near the highway to Damascus, witnesses said.

Two civilians died in early morning air raids on border villages, witnesses said. A 15-year-old boy was killed at Meis al-Jabal, and a man was killed at Blida.

was headed to the region as well.

"The goal is to create a situation in which we have as broad a space for diplomatic movement as possible," Peretz said after meeting 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."

Hezbollah rockets badly damaged a house and slammed into a major road in Haifa, Israel’s third-largest city, killing two people and wounding five. The militants’ rockets wounded at least 13 others.

In all, about 90 Hezbollah rockets fell Sunday across northern Israel. A similar number has hit the region almost daily since the Israeli offensive began.

Peretz said the campaign would continue as Israel tries to push Hezbollah guerrillas away from the border.

"The army’s ground operation in Lebanon is focused on limited entrances, and we are not talking about an invasion of Lebanon. We are beginning to see the army’s successes opposite Hezbollah," he told the Cabinet, according to a participant.

Peretz also met with German Foreign Minister Frank-Walter Steinmeier, one of a series of diplomatic meetings aimed at ending the fighting. French Foreign Minister Philippe Douste-Blazy was also on the schedule, and Secretary of State Condolezza Rice.

In Iran,President Mahmoud Ahmadinejad said Israel had "pushed the button of its own destruction" by attacking Iranian-backed Hezbollah guerrillas in Lebanon.

He didn’t elaborate, but suggested Islamic nations and others could somehow isolate Israel and its main backers led by the United States.

U.N. humanitarian chief Jan Egeland, meanwhile, inspected the destruction from Israeli air raids on south Beirut and he stressed need for a halt to the hostilities.

"It’s terrible, I see a lot of children wounded, homeless, suffering. This is a war where civilians pay a disproportionate price in Lebanon and northern Israel. I hadn’t believed it would be block by block leveled to the ground," he said.

He said the "disproportionate response by Israel is a violation of international humanitarian law."

On Monday, the United Nations will make an international appeal for "more than $100 million" in aid for Lebanon, Egeland said.

Egeland also planned to travel to Israel to coordinate opening aid corridors. The number of displaced people has grown to 600,000, according to the world health organization.