United Nations Secretary-General Kofi Annan has added his voice to a wave of condemnation of Israel's intense air strikes on targets in Lebanon.

Monday night's attacks - the heaviest raids for seven months - have also been strongly criticised by Syrian Foreign Minister Farouk al-Sharaa who said Israel had shaken the foundations of the peace process.

Fears of violent reprisals led Israel to declare a state of emergency in the north of its territory on Tuesday - making it mandatory for civilians to stay in bomb shelters.

At least 17 people were wounded in Israeli raids on power stations in Lebanon - retaliation for recent Hezbollah guerilla attacks in the occupied security zone in southern Lebanon.

On Tuesday night warplanes attacked a guerrilla official's residence in the southern port city of Tyre and targeted a village in a mountainous guerrilla stronghold inland, security officials said.

Helicopters fired three air-to-surface missiles, hitting the top floor of the 11-storey building in the city, 25km north of the Israeli border. At least two people were reported wounded.

Hezbollah has not so far launched attacks on Israel, but an Israeli soldier in the occupied security zone was killed on Tuesday by Hezbollah guerrillas.

Lebanese security officials said the Israeli soldier - the sixth to die in southern Lebanon in the past fortnight - was killed on Tuesday when guerrillas fired rockets at the Israeli military outpost at Dabshe.

Peace process in peril

BBC Jerusalem correspondent Hilary Andersson says the attacks and intensified fighting may spell the end of the peace process between Israel and Syria, a major power broker in Lebanon.

Syrian's Mr Sharaa said: "Israel must take full responsibility for sparking a military escalation in Lebanon, violating the April (1996 Grapes of Wrath) agreement and shaking the foundations of the peace process."

Under the 1996 agreement Israel and Hezbollah undertook to avoid civilian targets.

Our UN correspondent says Kofi Annan's brief statement makes clear his extreme concern about the latest Israeli attacks which appear to be in breach of the 1996 accord.

Mr Annan also pointed out that the recent escalation of hostilities on both sides has adverse implications for the overall Middle East peace process, which he argued should be given every chance to succeed.

'Door for peace still open'

Israeli Prime Minister Ehud Barak said he would not close the door to peace, but would do what was necessary to protect his people.

He has pledged to withdraw Israeli troops from southern Lebanon by July.

Visiting an underground bomb shelter near the Lebanese border, the Israeli prime minister said: "Our operation yesterday intended to signal to the Lebanese Government and Hezbollah and even the Syrians that Israel is not willing to accept unilateral violations and we will do whatever it takes to defend our citizens."

Click here to see Israel's bombing targets

Many Israelis living along the border with Lebanon spent the night in air raid shelters. They were advised by the army to remain in the underground shelters until further notice, while schools in the area are shut.

In the past, Hezbollah has tended to retaliate with Katyusha rocket attacks on Israeli towns and villages just across the border.

Hezbollah's response

In the event, Hezbollah has not so far retaliated with Katyusha attacks.

"We reserve the right to retaliate at the appropriate time, which could be very soon," the group said.

"The night-time attack cannot protect the Israeli army in the occupied zone from strikes by the resistance and (Israeli) soldiers will remain targets for Mujahedeen bombs, rockets and ambushes," the statement added.