Israeli authorities wouldn't rule out a full-scale invasion aimed at destroying Hezbollah positions, despite mounting calls for a ceasefire.
It comes as Israel issued fresh warnings for residents of Lebanon's south to flee the frontier zone.
Those who wished to escape from southern Lebanon, waved white scarves as they streamed to safer havens further north following Israel’s bombardment of the region for the 10th consecutive day.
Israel launched a military campaign against Lebanon after the militant Shi'ite Muslim group Hezbollah captured two of its soldiers on the 12th of July.
It sealed its border with Lebanon and imposed an air and sea blockade of its northern neighbour.
Lebanese army on standby
Lebanon said its army was ready to go into battle if Israel invaded, an action that would sharply raise the stakes in a conflict that in just 10 days has killed close to 340 people in Lebanon and forced over half a million to leave their homes.
"The Lebanese army will resist and defend the country and prove that it is an army worthy of respect," said Lebanese Defence Minister Elias Murr, whose forces have so far stood on the sidelines of the conflict.
Israeli Defence Minister Amir Peretz had warned that Israel would launch a full-scale ground invasion "without thinking twice" if necessary to crush Hezbollah, which has long been a thorn in the side of Israel.
Spokesman Captain Yaacov Dalal said they would "clean up the border zone on the Lebanese side by limited operations aiming to destroy Hezbollah's infrastructure."
Operations on the ground were "indispensable because the air force can not always destroy underground bunkers dug by Hezbollah, which has put in place an entire fortified network," he said.
Cpt. Dalal added that a major ground attack into Lebanon had not been ruled out.
Invasion speculation
According to America's NBC news it has been told by intelligence sources and an unidentified Western nation that Israeli troops are expected to enter Lebanon any time.
Israeli spokesman Mark Regev has told CNN after questioning on an imminent Israeli ground attack on Lebanon that there is a threat and Israel has to deal with the threat.
He said there have been land incursions in the past and there will be land incursions in the future as part of Israel's strategy to hit Hizbollah from the land. the sea and the air.
But an Israeli military source said on Saturday said that the Israeli army plans to step up pinpoint incursions into southern Lebanon but will stop short of a full-scale ground invasion.
"You should not expect a full-scale incursion into Lebanon," the Israeli military source told Reuters, adding that brief, targeted incursions would intensify along the border.
"We are already inside Lebanon and troops will continue to operate there because it is the only way to act against the Hezbollah bunkers there," the source, who did not want to reveal their identity, said.
The source estimated that several hundred troops were currently operating in Lebanon.
Rice visit scheduled
Despite criticism of US support for the bombardment, US Secretary of State Condoleezza Rice reaffirmed her rejection of the "false promise" of a ceasefire but said she would travel to the region on Sunday in search of a long-term solution.
Ms Rice said she would first meet Israeli Prime Minister Ehud Olmert and Palestinian leader Mahmoud Abbas, before heading to Rome for an international conference on the violence paralysing Lebanon.
But she rejected calls for an immediate ceasefire as a "false promise" based on the assumptions of the "old" Middle East, and ruled out any role in a peace deal for Hezbollah.
Death toll rises
At least seven civilians were killed in Israeli air raids in Lebanon on Friday which included the fiercest attacks in the east of the country since Israel launched its offensive.
According to police, four civilians were killed and 15 wounded in an intense bombardment of the Hezbollah stronghold of Baalbeck in eastern Lebanon and another was killed near
the southern port of Tyre.
Hezbollah also announced the death of two of its fighters, without saying where they had been killed, bringing the death toll for Shiite Muslim militia in the Israeli offensive to 11.
But Hezbollah also claimed it had arrested two "Israeli agents" in Lebanon who had been scouting bombing targets.
According to an AFP correspondent the raids, which lasted more than two hours, targeted homes, petrol stations and Hezbollah sites in Baalbek.
In the south, a girl was killed and her father and eight-year-old brother wounded when their motorbike was hit by an Israeli missile in a late-evening strike south of Tyre.
One civilian was killed and eight others wounded in air raids on the town of Nabatiyeh to the east.
Tens of thousands of people have fled the southern border area, which Hezbollah has in its grip with no Lebanese army presence, as fears of a humanitarian crisis mount.
At least 341 people have been killed in Lebanon since the start of the Israeli offensive.