Battles between Israeli forces and Hizbullah fighters raged Tuesday across south Lebanon as diplomats at the United Nations worked frantically to hammer out a peace plan that would take into account the Lebanese demand for an immediate Israeli withdrawal.

Israeli Prime Minister Ehud Olmert reacted cautiously to Lebanon’s pledge to send 15,000 troops to the south describing the proposal as "interesting." At the same time, military planners in Jerusalem said they plan to push even deeper into Lebanon to target rocket sites.

In New York, U.N. Security council members tried to find a compromise between the original text drafted by the U.S. and France which calls for a step-by-step solution and Lebanon’s insistence — supported by Arab nations — that nothing can happen before Israeli soldiers leave the country.

Russia said it will not support any draft resolution that is "useless" for the Lebanese government.

Meanwhile, fierce battles continued to rage between Israeli forces attempting to fight their way into the south and Hizbullah fighters in the border towns of Bint Jbeil and Aita al Shaab. The Israeli military said three soldiers and 15 Hizbullah fighters were killed in fighting in the south. It also said it captured five of the group’s fighters in Bint Jbeil. There was no confirmation from Hizbullah.

Local television stations reported that Israeli gunships destroyed 30 houses in the two border towns during the battles.

Lebanon pledged Monday to send 15,000 troops to a peacekeeping mission in the south after Israel pulls back. The plan was backed by all cabinet members, including its two Hizbullah members.

Olmert, speaking at a news conference in Jerusalem, said he needs time to think about the plan before giving his response.

"We have to study all the aspects and see how realistic it is to carry them out in reasonable time," he said.

Olmert said Israel would favor leaving southern Lebanon once it considers that Hizbullah is no longer a direct threat.

"The faster we leave Lebanon, the more satisfied we’ll be. But that will not be possible before our goals are met."

But just hours earlier, Israeli Defense Minister Amir Peretz outlined plans to drive deeper into Lebanon to try to destroy Hizbullah rocket batteries. Peretz said a new Israeli push — expected to be approved by Israel’s Security Cabinet on Wednesday — would extend as far as the Litani River, about 30 kilometers north of the border.

Israel threw leaflets on Tuesday warning it would strike any vehicle traveling south of the Litani. This new threat followed a curfew the Israeli army imposed on the area starting 10:00 p.m. Monday which excluded humanitarian traffic.

Meanwhile, Israel expanded air strikes around Lebanon, including the Bekaa Valley. Security officials identified 8 people who were killed in raids Monday night on the town of Britel near Baalbeck. Twenty three others were wounded and at least 10 houses were destroyed, they said.

Rescue workers continued to work frantically to pull out 28 people who are feared buried under the rubble of a building in the Chiah district south of Beirut after ferocious strikes last night destroyed four buildings there killing 28 people and wounding 65.

Many of the victims were refugees who fled fighting in the south and Israeli bombing of districts deeper in the southern suburbs which have been targeted since the beginning of the offensive.

The coming days should offer signs on whether a ceasefire plan has a chance.

Washington and Paris were expected to circulate a new draft in response to amendments proposed by Qatar, the only Arab nation on the 15-nation Security Council, and other members, diplomats said. A vote is not expected before Wednesday at the earliest.

Russian Foreign Minister Vitaly Churkin said "intensive efforts" are being exerted to come up with a resolution more favorable to Lebanon.

"For us of course, a draft that is useless to the Lebanese side must not be adopted since it will only lead to the continuation of the conflict," he told the Vesti-24 news channel in Moscow.

The proposed changes include a call for Israeli forces to pull out of Lebanon once the fighting stops and hand over their positions to U.N. peacekeepers. Arab states also want the U.N. to take control of the disputed Shabaa Farms area, which Israel seized in 1967.

Qatar’s foreign minister, Hamad bin Jassem Al Thani, warned of "a civil war in Lebanon" between Hizbullah and government forces if the Security Council does not make changes to the U.S.-French draft resolution. "This is what we don’t want to happen and Lebanon won’t bear it," he said, speaking on the Al-Jazeera network.