Israel has massed soldiers and tanks on the border with Lebanon and called up thousands of reserve troops, in a possible prelude to a ground offensive.
Planes dropped leaflets on southern Lebanon warning any civilians to leave.
Israeli soldiers are already fighting Hezbollah inside Lebanon, but the army chief of staff said any incursion into the country would be limited in scope.
The United Nations humanitarian chief Jan Egeland is due to arrive in Beirut to assess the crisis on the ground.
Mr Egeland has warned the situation is deteriorating by the hour, with half a million people needing assistance - a number, he said, which was likely to grow dramatically.
He is expected to call on Israel to guarantee safe passage by land, sea and air for humanitarian supplies.
US Secretary of State Condoleezza Rice is travelling to the Middle East on Sunday, as is German Foreign Minister Frank Walter Steinmeier, who helped broker a prisoner exchange between Israel and Hezbollah in 2004.
The latest crisis was triggered by the capture of two Israeli soldiers by Hezbollah militants on 12 July.
Fierce clashes
On the 11th day of the air campaign against Lebanon, Israel continued its assault, saying it was targeting Hezbollah rocket launchers and command posts, along with roads linking Lebanon to Syria.
It hit at least two communications and TV transmission towers - one in the Kesrwan mountains, east of Beirut, and in Terbol in northern Lebanon. There was no word on casualties.
The Israeli air force says it has hit 70 targets in Lebanon since Friday night, and 1,800 targets over the course of the campaign.
Israeli soldiers are continuing some ground incursions into Lebanon, and are currently occupying one Lebanese village, Maroun al-Ras, but have withdrawn from another, Marwahin.
They have met fierce resistance at Maroun al-Ras, with six soldiers killed over the last three days.
Between two and 10 Israelis are said to have been injured in northern Israeli towns, as rockets continue to be fired over the border.
White flags
The BBC's Martin Asser is travelling south on the main road between Beirut and Tyre, close to the Israeli border.
Mid-East crisis map
He passed hundreds of cars heading north, packed with families fleeing from the area where the Israelis dropped leaflets on Friday.
Many cars were flying white flags to show they were civilians.
The exodus has created a huge traffic jam outside Tyre, which is preventing some Lebanese entering the town to rescue family and friends, our correspondent adds.
Meanwhile the Israeli army has insisted a large-scale invasion is not imminent, despite the thousands of reservists who have been called up.
It said raids across the border would continue, targeting Hezbollah bunkers and tunnels that could not be destroyed from the air.
'No occupation'
Marcus Shef, a spokesman for Israeli Defence Force, told the BBC: "We have no intention whatsoever of occupying Lebanon, we came out of Lebanon in 2000, without the intention of going back into Lebanon.
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"We have a very clear intention to protect Israeli civilians from Hezbollah attack."
It is thought Israel wants to set up a deep buffer zone in southern Lebanon to try to stop Hezbollah from using the area to launch rocket attacks.
But senior Lebanese officials have warned the country's army will go into battle if Israel invades.
Lebanese Prime Minister Fouad Siniora said the number of Lebanese killed in the 10 days of violence is now more than 330.
Thirty-four Israelis have been killed in the fighting, including 15 civilians killed by rockets fired by Hezbollah into Israel.
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