An Israeli soldier of the engineering corps was killed in the eastern area of southern Lebanon when a mortar shell fired by Hezbollah guerillas hit his vehicle, said the army.

Another soldier was wounded.

Meanwhile, eight Israeli naval commandos were wounded in a battle in the Lebanese coastal city of Tyre on Saturday, the army said.

Two of the wounded were in serious condition, said the army,adding that the Tyre operation targeted Hezbollah rocket launchers including those used to launch rockets onto the Israeli city of Hadera.

Two Hezbollah rockets landed Friday in Hadera, about 75 km from the Israel-Lebanon border. It is the deepest area inside Israel that Hezbollah rockets have ever reached since the conflict broke out over three weeks ago.

A large number of Hezbollah fighters were killed in the operation, said the Israeli army.

Israel has stepped up military operations in Lebanon as Lebanon's Hezbollah guerillas have intensified rocket attacks against the Jewish state.

Earlier on Saturday, five Israelis were wounded in a Hezbollah rocket attack in the northern Israeli city of Haifa.

Violence between the two sides broke out on July 12 when Hezbollah guerillas kidnapped two Israeli soldiers and killed eight during cross-border attacks.