At the same time, Israeli Foreign Minister Tzipi Livni says an Israeli military assault has weakened Hezbollah and created a chance for the Lebanese government to assert its sovereignty.
"The army has many possibilities for action," Moshe Kaplinsky, Israel's deputy army chief, told Israel Radio.
"At this stage we do not think we have to activate massive ground forces into Lebanon but if we have to do this, we will. We are not ruling it out."
Israeli Foreign Minister Tzipi Livni made the comments about a ‘weakened’ Hezbollah on US television.
She said that Israeli air raids had created an opening for the central government in Lebanon to carry out a UN resolution that requires the disbanding and disarming of Hezbollah and other militia.
But Lebanese President Emile Lahoud, a staunch ally of Hezbollah and Syria, has reportedly said his state "would never abandon (Hezbollah's leader) Sayyed Hassan Nasrallah."
Earlier, Israeli Prime Minister Ehud Olmert vowed his country would continue its offensive in Lebanon, where Israeli raids have left more than 200 people dead, until Hezbollah disarms
and frees two captured Israeli soldiers, and Lebanese troops are
deployed along the border.
Family of 6 killed
In other developments, a family of at least six were killed when their home in the village of Aytaroun was bombed by Israeli raids in southern Lebanon.
Earlier, television footage showed balls of fire and clouds of smoke billowing from a Lebanese army position east of Beirut after
repeated Israeli air strikes. Several soldiers were wounded.
Jbeil raid
Lebanese police said Israeli airforce planes launched a pre-dawn raid on the Lebanese coastal town of Jbeil, formerly Byblos, 30 kilometres north of Beirut, without causing any casualties.
Israeli aircraft also hit targets in and around Beirut.
The Israeli retaliation has killed 210 people, all but 14 of them civilians, and inflicted the heaviest destruction in Lebanon
for two decades, with attacks targeting ports, roads, bridges,
factories and petrol stations.
Hezbollah has responded by attacking a naval vessel off Beirut and firing hundreds of rockets at northern Israel, killing 24 people,
12 of them civilians.
The Jewish state is also engaged in a military offensive in the
Gaza Strip after Palestinian militants captured another soldier on
June 25.
Hezbollah 'war crimes'
Meanwhile Human Rights Watch says Hezbollah's attacks on Israel with imprecise rockets in civilian areas violated international humanitarian law and most likely constituted "war crimes."
The attacks on Sunday and Monday were "at best indiscriminate attacks in civilian areas, at worst the deliberate targeting of civilians," the New York-based group said in a statement.
"Either way, they were serious violations of international humanitarian law and probable war crimes," it said.
Evacuations continue
France, the United States, Britain and other nations are scrambling to evacuate their citizens from Lebanon, chartering ships to sail them to safety.
Many foreigners have already left by road to Syria after Beirut
airport was bombed and closed.
Meanwhile some Australians will be able to escape Lebanon on a British warship after the United Kingdom agreed to allow them to board its aircraft carrier being dispatched to the Middle East.
The Australian government is planning to evacuate 90 more Australians by bus after 86 were evacuated to Jordan via Syria yesterday and is also trying to charter a ferry to evacuate up to 600 people to Cyprus.
Prime Minister John Howard said the government promised to do all it could to evacuate Australians but warned the exercise was getting increasingly dangerous.