July 16 (Bloomberg) -- Hezbollah rockets today reached the central train station in Haifa, Israel's third-biggest city, and killed eight railroad workers. Israel warned villagers to flee as it promised to pound southern Lebanon with air assaults.

The eight dead were in a railway maintenance garage during the attack at about 9:20 a.m. local time, an Israeli army spokeswoman said. Israel has lost 24 people since the conflict began July 12 and its Home Front command warned residents of Tel Aviv, the commercial center, to be on alert for a possible attack. At least 110 Lebanese civilians, three soldiers and two Hezbollah fighters have been killed, Lebanese police said.

``We recommend that they leave their villages and homes and go to the north of the country,'' Israeli Major General Uzi Adam said at a news conference, after planes dropped leaflets that warned Lebanese of the forthcoming air raids. ``We are going to heavily attack the south of Lebanon.''

The assault on Lebanon is Israel's broadest since 1982, with warplanes striking targets across three quarters of the country. Hezbollah rockets have forced northern Israelis into shelters and brought life to a standstill. Israel is also fighting Palestinian militants in the Gaza Strip, killing six in 24 hours.

``We have no intention of giving in to these threats,'' Israeli Prime Minister Ehud Olmert said in remarks broadcast from the weekly Cabinet meeting. ``Our enemies are trying to disturb daily life. They will fail.''

Hezbollah Leader

Israel's Channel 2 television said Hezbollah leader Hassan Nasrallah, 45, was wounded in an Israeli attack, without saying where it got the information. Nasrallah later delivered a speech on television, appearing calm and healthy as he took credit for the Haifa bombing and swear vengeance against Israel.

``As long as the enemy acts without limitations, it is our right to act similarly,'' Nasrallah said in the taped address. ``We are at our full strength and power. We will choose the place and the time, and we will not let the enemy impose the means or place to use their weapons.''

Javier Solana, the European Union's foreign policy chief, is traveling to Beirut today for talks with Prime Minister Fouad Siniora, the EU said in a statement.

U.S. Secretary of State Condoleezza Rice said she is ready to travel to the region to encourage negotiations ``when I believe that I can make a difference.''

``Simply going in and shuttling back and forth, if you don't know where you're trying to go, is not going to help,'' she said in an interview today on the ``Fox News Sunday'' program.

Oil Record

The cross-border fighting has sent crude oil prices to a record and contributed to declines in U.S. and European stock markets amid concerns it may widen into a broader conflict. The Middle East provides a third of the world's oil.

The Tel Aviv Stock Exchange's benchmark TA-25 index fell as much as 4 percent today, before rebounding 3.2 percent. Egypt's main stock index, the CASE 30, dropped 5.8 percent.

Crude oil may rise further this week on concern Middle East shipments will be disrupted, according to 20 of 34 analysts and traders surveyed by Bloomberg News.

Lebanopn's Siniora yesterday called for a United Nations- backed cease-fire and for his government to re-establish its authority in the country's south. Hezbollah controls southern Lebanon and staged the kidnapping raid into Israel July 12 that started the conflict. Israel accused Iran of aiding Hezbollah fighters in southern Lebanon.

Stationing troops in the south, where Hezbollah gunmen operate without any government interference, would meet one of Israel's conditions for ending its attacks.

Without Conditions

``I understand Siniora will put in his army in the south,'' Shaul Mofaz, Israel's transport minister and a former chief of staff, told reporters. ``Nobody is blocking his way. He should do so and without conditions.''

Former Israeli Prime Minister Ehud Barak said fighting will probably escalate until the Lebanese government takes steps to end it. He doubts Israel will invade Lebanon with ground forces, relying on air and sea attacks instead.

For now, Israel has no option but to continue the military offensive in south Lebanon, said Eyal Zisser, a research fellow at Tel Aviv University's Moshe Dayan Center. ``Lebanon is waiting for the world to come in and get involved in this conflict, and to make Hezbollah surrender,'' he said.

Israel hasn't launched a full-scale military attack on Lebanon or Hezbollah since it pulled its troops out of a swathe of southern Lebanon held for 18 years until May 2000.

Israeli Aircraft

Israeli forces today hit two coastal radar stations operated by the Lebanese army, as well as Hezbollah headquarters and a compound that houses the organization's al-Manar television station, an army spokeswoman said. Lebanon's army fired on and missed an Israeli aircraft over the Lebanese coast, she said.

Three Israeli sailors reported missing after a radar-guided missile hit their gunboat were confirmed dead, an army spokeswoman said. The laser-guided missile that struck the boat was supplied by Iran, Brigadier General Noam Faig said at a Tel Aviv news conference.

World leaders, including U.K. Prime Minister Tony Blair, Russian President Vladimir Putin and French President Jacques Chirac, have called for Israel to restrain its response to rocket attacks and the capture of its soldiers.

U.S. President George W. Bush stopped short of endorsing a cease-fire called for by Putin, but urged Israeli restraint.

Blair joined Bush today in blaming Iran and Syria for the escalation of violence.

Syria will respond with ``firm and direct'' action to any Israeli assault, Information Minister Mohsen Bilal was quoted by the state-run Syrian Arab News Agency as saying.

Evacuation Plans

Iranian Foreign Ministry spokesman Hamid Reza Asefi said all Muslim countries should defend Syria and Lebanon against Israel.

Italy and the U.K. sent warships to the eastern Mediterranean as most of the Group of Eight countries, meeting in St. Petersburg, Russia, made plans to evacuate their citizens from Lebanon and Israel.

The U.S. is assessing whether to evacuate an estimated 25,000 American citizens in Lebanon ``practically hour by hour,'' Condoleezza Rice said today at the G8 meeting.

No flights to and from Israel have been canceled, said Pnina Ben-Ami, an adviser to the tourism ministry. She said tourists staying in the north, where tourism centers such as Tiberias and Safed have been hit, had moved south to cities such as Jerusalem that are out of the range of the rockets.

To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net Dania Saadi in Cairo at at dsaadi2@bloomberg.net.

Last Updated: July 16, 2006 13:15 EDT