An Israeli ground and air operation is under way near Baalbek in Lebanon - a Hezbollah stronghold more than 100km (60 miles) north of the Israeli border.
An Israeli helicopter landed and fierce clashes with Hezbollah fighters broke out near a hospital, local reports said. Israel has refused to comment.
Israeli forces have also pushed deeper into south Lebanon aiming to set up what Israel dubs a "security zone".
Israel said it would resume air strikes after a 48-hour partial halt.
The Israeli security cabinet on Tuesday unanimously approved widening Israel's ground offensive in Lebanon.
Some reports said troops would push as far as the Litani River - up to 30km (18 miles) from Israel's border.
Israel warned civilians north-east of the river to leave their homes.
Prime Minister Ehud Olmert said Israel was "winning the battle" against Hezbollah, which he said would never again be able to threaten the Jewish state.
Mr Olmert said it was not in Israel's interest to declare an immediate ceasefire.
But he added that a diplomatic process was under way which he believed would "lead in the end to a ceasefire under totally different conditions from those which existed previously on our northern border".
'Aircraft over Baalbek'
Tuesday's Israeli operation in eastern Lebanon started with several air strikes in the Baalbek area.
The city is a Hezbollah stronghold and has been pounded by the Israelis over the last three weeks.
Israeli gunships are hovering at low altitude above hilltops overlooking the city, the BBC's Kim Ghattas in Beirut says.
Hezbollah spokesman Hussein Rahal told the Associated Press news agency that Israeli troops had landed at the hospital in Baalbek.
He said there had been fierce fighting as Israeli soldiers had entered the hospital and become trapped inside as Hezbollah fighters had surrounded the building.
Witnesses told Reuters news agency there was fierce fighting with assault rifles, grenade-launchers and machine guns around the hospital.
Two petrol stations in the area were also targeted and set on fire, our correspondent reports.
In other developments
- European Union foreign ministers meeting in Brussels meanwhile called for an "immediate cessation of hostilities", to be followed by a "sustainable ceasefire" - rather than the immediate ceasefire urged by some members.
- US Secretary of State Condoleezza Rice said an agreement on ending the fighting was possible within "days, not weeks".
- A French official told the AFP news agency that France would boycott a meeting on Thursday of potential contributors to an international stabilisation force - the official said France considered the meeting "premature".
- Aid agencies said six convoys were unable to deliver humanitarian supplies to conflict hit areas because Israel had not given safe passage guarantees.
Tuesday saw fierce fighting across southern Lebanon, with casualties on both sides.
Israel said three of its soldiers died when an anti-tank missile hit the house they were in, in the town of Ait al-Shaab.
The Israelis say that they "hit dozens of Hezbollah gunmen" but could not give more details.
Hezbollah said four of its fighters died in battles in Kfar Kila, Adiasse and Taibe, while a mother and her two daughters were killed in an Israeli air strike on the southern town of Lweizeh, Lebanese officials said.
Fighting is also reported to have flared around the former Hezbollah stronghold of Bint Jbeil, from where Israeli troops withdrew last week.
Israel launched its offensive after Hezbollah militants seized two of its soldiers in a cross-border raid.
After nearly three weeks of fighting, about 750 people - mainly civilians - have been killed by Israeli action in Lebanon, according to Lebanon's health minister.
A total of 54 Israelis, including at least 18 civilians, are known to have been killed by Hezbollah.