TEL AVIV, Israel, July 12 (UPI) -- At least seven Israeli soldiers have been killed in cross-border clashes with Hezbollah gunmen after the Shiite group kidnapped two troops in an early attack.
An Israeli military source speaking to United Press International on condition of anonymity said the soldiers were killed in the shelling of an Israeli tank by Hezbollah gunners. He said the tank was inside Lebanese territory when it received a direct hit.
The source projected that the IDF will carry out a large-scale military operation in Lebanon in an attempt to free the two soldiers.
He said Israel is massing large numbers of troops on the border with Lebanon and that reserve forces that back fighting units have been mobilized "on a limited scale."
Israel has held the Lebanese government responsible for the violence flare-up Wednesday sparked by the kidnapping of the two soldiers.
Israeli Prime Minister Ehud Olmert said the attack carried out by the Iranian-backed Hezbollah against Israel across the border was not a terrorist act but a military operation carried out by a state and the government of Lebanon assumes responsibility.
Speaking at a press conference with visiting Japanese Prime Minister Junichiro Koizumi, Olmert vowed a painful retaliation against Lebanon.
Defense Minister Amir Peretz said "the government of Lebanon which allows Hezbollah to act freely against Israel from inside its territory will assume full responsibility for the consequences and results of the attack this morning on the northern border."
Peretz also held the Lebanese authorities directly responsible for the fate of the two soldiers, saying "Lebanon should work immediately and firmly to find them, ensure their safety and return them to Israel."
"The State of Israel sees itself free to use all measures that it finds it needs and the IDF have been given orders in that direction," he added.
For his part, the Army Chief of Staff Maj. Gen. Dan Halutz threatened that in case the kidnapped soldiers were not returned to Israel, the Army will "take Lebanon 20 years back."
Olmert called a special Security Cabinet meeting to address the developing situation.
Israel continues to pound Hezbollah targets with airstrikes and tank fire, responding to rocket attacks into northern Israel, according to the Army.
The IDF instructed citizens in northern villages to take shelter as the violence escalated in the latest skirmish between Israel and Hezbollah, which traded cross-border fire in late May following the assassination of an Islamic Jihad official in the southern Lebanese city of Sidon.
Hezbollah is designated a terrorist group by the United States and Israel but is a significant player in Lebanon's fractious politics.