MARJAYOUN, Lebanon (Reuters) - Israeli troops seized the town of Marjayoun and two nearby villages in south Lebanon on Thursday, witnesses said, even though Israel says it has put off plans for a broader offensive against Hizbollah guerrillas.
A Reuters journalist said Israeli troops were moving on foot through Marjayoun, a Christian town about 8 km miles inside Lebanon. He said the Israelis were also inside Burj al-Molouk and Qlaiah, with tanks deployed on roads nearby.
A local Marjayoun official told Al Jazeera television there had been gunfire and shelling before the Israelis moved in.
"There is heavy gunfire that started around 3:30 a.m. (0030 GMT) and there is a lot of shelling on the outskirts of the town. A gas station was burned and a shell fell on a house," said Fouad al-Hamra, identified as head of the municipality.
"They reached here around 3:30 a.m.," he said by telephone. "We heard the sounds of tanks and now I can see a big fire on the eastern outskirts of the town."
Hamra said he did not think there had been any clashes in the town between Hizbollah guerrillas and the Israelis.
An Israeli cabinet minister confirmed that plans for an expanded ground offensive, approved on Wednesday, had been put on hold to allow more time for U.S.-led diplomatic efforts to halt the Lebanon war, now in its fifth week.
"There is a certain diplomatic process under way," Tourism Minister Yitzhak Herzog said. "We can allow a little more time to see if there's a possibility for a diplomatic process."
But Herzog, a member of Israel's security cabinet, made clear Israel would execute its military plans if talks failed.
"If there won't be a diplomatic solution, there will be a need to remove this threat," he told Israel's Army Radio, referring to more than 3,300 rockets Hizbollah guerrillas have rained on northern Israel since hostilities erupted on July 12.
"GRAVEYARD FOR INVADERS"
Hizbollah guerrillas were battling Israeli forces up to 10 km inside Lebanon after the Shi'ite Muslim group's chief vowed to turn the south into a graveyard for the invaders.
An Israeli military source said the incursion in the eastern sector aimed to stop Hizbollah firing rockets at the northern Israeli town of Kiryat Shmona from the Khiam border area.
Big powers are split on a U.N. resolution on Lebanon. Paris and Washington are at odds over when the foreign force, possibly led by France, should move in and when Israel should withdraw.
Lebanon wants Israeli troops out quickly, but Israel says it will leave only when foreign troops supporting the Lebanese army take over. The United States agrees with Israel, warning against any security vacuum that would allow Hizbollah to regroup.
The Israeli army said 15 of its soldiers and 40 Hizbollah guerrillas had been killed on Wednesday, one of the bloodiest days of fighting in the conflict that began after Hizbollah captured two Israeli soldiers in a cross-border raid.
Israeli television said the bodies of Iranian Revolutionary Guards had been found among guerrillas killed in Lebanon. There was no independent confirmation. Hizbollah denied the report.
Hizbollah leader Sayyed Hassan Nasrallah earlier warned Israel against expanding its offensive in Lebanon
"You won't be able to stay in our land, and if you come in, we'll force you out. We will turn our precious southern land into a graveyard for the invading Zionists," Nasrallah said.
In a televised speech, he also urged Arab residents of Haifa to leave the Israeli city to avoid Hizbollah rocket fire.
Olmert's security cabinet on Wednesday approved plans to send troops further into Lebanon, possibly to the Litani river, up to 20 km from the border. A senior political source said the expanded offensive could last 30 days.
U.S. State Department spokesman Sean McCormack reiterated that Israel had a right to defend itself but said Israel "must take the utmost care" to avoid civilian casualties.
The war has cost the lives of at least 1,005 people in Lebanon, mostly civilians, and 116 Israelis, mostly soldiers.
Diplomats are still working on a U.N. resolution aimed at ending the war but no Security Council vote seems imminent.
Washington's U.N. envoy, John Bolton, made clear no deal had been struck. "There are areas where we are still not in agreement," he said. "I don't want to appear to minimise that."
(Additional reporting by Beirut, Jerusalem, United Nations, Washington and Paris bureaux)
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