A government official announced the decision of the expansion early Tuesday morning, while Israeli Prime Minister Ehud Olmert resisted international calls for a ceasefire.
Despite Israel’s announcement on Monday of a partial 48-hour suspension of bombing, its jets resumed bombing targets in southern Lebanon.
The halt in air raids followed international outrage over an attack on the village of Qana that left more than 50 civillians dead.
However, Israel said it may still use aerial strikes to target Hezbollah leaders and rocket launchers and back up ground operations.
Lebanese soldier killed and officials wounded
Israeli warplanes have struck deep inside Lebanon targeting another Hezbollah stronghold.
Witnesses have said the jet fighters have hit Hermel 120 kilometres north of the Israeli border in the Bekaa Valley in eastern Lebanon.
They said warplanes have fired at least five air-to-surface missiles on the town but it's not clear what's been hit and whether there are any casualties.
Meanwhile the army’s artillery shells hit two villages and an air strike on a Lebanese army vehicle killed one soldier and wounded three.
Security sources also reported that at the main border crossing into Lebanon from Syria, Israeli drones fired at two trucks and a third truck was destroyed by a warplane. Four Lebanese customs officials and the three drivers were wounded.
The Israeli military said it had launched a new ground incursion into Lebanon in the Aita al-Shaab area. Hezbollah said its guerrillas were fiercely resisting the advance.
Hezbollah rockets resume
Hezbollah fired two shells into the northern Israeli border town of Kiryat Shmona today, but nobody was wounded.
It was the first Hezbollah bombardment of Israel since Sunday evening, a distinct lull compared to the scores of rockets they had previously fired daily.
According to police Hezbollah guerrillas also fired a missile on an Israeli warship off the coast of the southern Lebanese port city of Tyre on Monday, but the Israeli army denied the claim.
The militant group's military wing, the Islamic Resistance, claimed in a statement that its guerrillas had "destroyed a Zionist warship ... off Tyre."
"This is the begining of the vengeance for the children of Qana," it read.
But the Israeli military denied that any of its ships off Lebanon's coast had been targeted with a missile. "The report is simply not true," a spokesman said.
Israel launched its onslaught on Lebanon after Hezbollah captured two Israeli soldiers in a cross-border raid on the 12th of July.
At least 598 people have been killed in Lebanon, although the health minister puts the toll at 750 including bodies still buried under rubble. Fifty-one Israelis have been killed.
Humanitarian operation struggles
Israel said it was giving a 24-hour window to allow aid workers to reach the worst hit areas and residents to flee.
But because of the continued Israel strikes in southern Lebanon, the United Nations said access had not improved.
"Let's be clear about this ... we don't have a cessation of hostilities and we don't have a cessation of aerial bombardments," UN spokesman Khaled Mansour in Lebanon said.
Mr Mansour said the UN was forced to stick to the same procedure it was using before the suspension, namely trying to get clearance for each aid convoy from the warring parties before leaving Beirut.
"If we want a system where we can send convoys anywhere over a period of 48 hours, then we need guidelines," Mr Mansour said. "We don't have the precise clarification of the terms of this policy and the exact guidelines."
"We're planning to send three convoys to the south tomorrow but we're still waiting for the green light which is not enough," he said. "There are massive needs in the region, and they are growing.”
At the United Nations, UN emergency relief coordinator Jan Egeland said Israel had given no information on the scope and timing of any pause in the bombing.
Scores flee
The Australian government is scrambling to evacuate hundreds more of its citizens from Lebanon before a brief Israeli halt on air strikes ends.
Foreign Minister Alexander Downer said the Australian embassy in Beirut is chartering taxis and buses to get up to 300 Australians out of the country during the 48-hour reprieve.
Civilians fled battered villages in southern Lebanon as some aid convoys headed into the area to deliver supplies.
Mr Downer’s told ABC radio it's not going to be easy getting all the Australians out before the deadline's up because of ongoing fighting.
Rescue workers found 49 bodies buried for days in collapsed buildings or inside destroyed vehicles, medical sources said.
Northern Israelis venture out
Some northern Israelis ventured cautiously back onto the streets on Monday as Hezbollah eased its barrages of rockets, but few here believed the lull would last.
"This is my first time out of the bomb shelter in nearly three weeks," said Kfer Koriyat, a 36-year-old factory worker, as he walked down the main street of this beach resort just six kilometres from the Lebanese border.