Hezbollah, the Islamic Resistance Movement of Lebanon declared Wednesday at 9.05 am that it had captured two Israeli soldiers in an attack meant to secure the release of Palestinians being held as ‘prisoners of war’ in Israeli prisons.

The statement said: "In order to fulfill a promise to free the prisoners and detainees, the Islamic Resistance captured two Israeli soldiers at the borders with occupied Palestine."  The statement added that the soldiers are safe, and have been moved to a safe location.  An Israeli army spokesman confirmed the abduction this morning.

According to Agence France Presse, the seizure of the two soldiers threatens to open up a new front in the troubled region after the capture of another Israeli soldier in Gaza two weeks ago sparked a large-scale Israeli invasion of Gaza that has killed over 60 Palestinians, most of them civilians, and is ongoing.

Israeli occupation Prime Minister Ehud Olmert vowed that those who "try to shake Israel’s determination" will "pay heavily" for their actions as Israeli troops rolled across the international border for the first time in six years.

"Difficult days continue for both Israel and Muslim people," Olmert said as he greeted visiting Japanese Prime Minister Junichiro Koizumi.

"There are some people who try to block our stability. There are some people who try to shake our determination, but they will be beaten and they have to pay heavily for their acts," he was translated as saying.

Koizumi, who was on the first visit to the Middle East by a Japanese leader for more than a decade, voiced concern at the deterioration in the situation.

Hezbollah fighters fired dozens of Katyusha rockets and mortar rounds on the Israeli occupied Shebaa Farms border area, security sources said.

There was also a barrage of fire towards Israel from Lebanon on the western end of the northern border, close to the Mediterranean coast, the sources added.

The shelling, accompanied by automatic gunfire, began at 9:00 am, Israeli military sources said.

Israeli forces promptly launched a ground and air assault on Lebanon, a military spokesman said. It was the first ground operation since Israeli troops withdrew from southern Lebanon in May 2000.

"Our planes, tanks and artillery are operating inside Lebanese territory," the spokesman said.

Israel has previously been on high alert for possible retaliation from Hezbollah following threats to kill Hamas militants harboured in Damascus and an Israeli ‘fly-over’ the Syrian president’s home that violated Syrian air space two weeks ago.

The explosions hit the border area shortly after Israeli tanks and troops pushed a new offensive in the central Gaza Strip, killing six family members, including the mother, father, and children, in an air strike Wednesday morning.

The fresh crisis developed even as the situation continued to deteriorate in the Gaza Strip, where Palestinian militants are still holding Gilad Shalit, a 19-year-old Israeli corporal seized on June 25.

In an interview published Wednesday, Egyptian President Hosni Mubarak said his mediation efforts for Shalit’s release had been sabotaged by an unnamed party.

Mubarak said he had reached a deal with Israel for "a large number of prisoners" to be released but added that Hamas came under fresh pressure and the mediation failed.

Hezbollah and its leader Hassan Nasrallah have repeatedly urged Hamas not to release the Israeli soldier, arguing that his capture was the best bargaining chip for the release of Palestinian and Arab prisoners.

The three groups detaining Shalit in the Gaza Strip have demanded the release of 1,000 Palestinian, Arab, Muslim and "other" prisoners.

Israel has so far refused to negotiate and launched a large-scale operation against the Gaza Strip, killing 60 Palestinians in the last week alone and destroying much of the territory’s infrastructure.

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