The Israeli newspaper Haaretz reported an angry exchange between Defense Minister Amir Peretz and his predecessor, Shaul Mofaz, in the Security Cabinet meeting. When Mofaz criticized plans for the new offensive, Peretz reportedly shot back: "Where were you when Hezbollah built up this array (of weapons)?"

Secretary of State

Condoleezza Rice called during the meeting, officials said, and Olmert told ministers after his half-hour conversation with her that the offensive would be accompanied by a new diplomatic push.

Under the army plan, Israeli forces would move to the Litani River, some 20 miles from the Israel-Lebanon border. At the moment, more than 10,000 troops are engaged in house-to-house battles against Hezbollah fighters in a strip less than half that size.

Even in the current war zone, Israeli troops have had trouble taking control of towns and villages. Security officials say the guerrillas' bunkers, well equipped with food, weapons and electricity, are a reason for Hezbollah's stamina. During lulls in the fighting, gunmen emerge and set up new ambushes for troops.

The U.N.'s top humanitarian official criticized Israel and Hezbollah for hindering aid agencies' access to trapped civilians in southern Lebanon.

"The Hezbollah and the Israelis could give us access in a heartbeat," Jan Egeland said in Geneva. "Then we could help 120,000 people in southern Lebanon. I don't think that any military advantage has been gained in these last days or will be gained in the next few hours."

The Red Cross asked the Israeli rescue service to help lobby the Israeli government to allow more aid supplies into Lebanon, said Paul Conneally, deputy head of the International Committee of the Red Cross in Israel.

On Thursday, troops backed by tanks and armored vehicles took up positions on the outskirts of the Christian town of Marjayoun in south Lebanon, about six miles from the border. Troops met no resistance. Soldiers also moved to a nearby hill overlooking the Litani River Valley, witnesses said. Heavy battles were reported in south Lebanese villages across from Israel's Galilee panhandle, hard hit by rockets.

Israel hopes an expanded offensive will force Hezbollah guerrillas out of their strongholds across southern Lebanon. The offensive is expected to last a month and eliminate 70 percent to 80 percent of Hezbollah's short-range rocket launchers, but not its long-range launchers, senior military officials said.

However, Trade Minister Eli Yishai, who abstained in Wednesday's vote, said the assessment is too optimistic, saying he thought it would take "a lot longer."

Danny Yatom, a senior member of Peretz' Labor Party and a general in the reserves, said moving deeper into Lebanon was pointless.

"We are banging our head against the wall," he told Israel TV's Channel One. "And even if we reach the Litani, the Katyushas (rockets) won't stop.

So far, the fighting has killed 711 people on the Lebanese side and 120 Israelis, including 38 civilians and 82 soldiers.

The economic price was also going up. Finance Minister Avraham Hirchson said the war has cost Israel some $1.6 billion so far. He said he will ask the government to cut $650 million from the 2006 state budget to help pay for the war. Israel's total budget for 2006 is $56 billion.

The prospect of a wider war would put tremendous pressure on the

United Nations to rapidly agree on a cease-fire. The fighting has caused widespread destruction across southern Lebanon and forced hundreds of thousands of Israelis to flee or take refuge in bomb shelters.

However, France and the U.S. remained divided over a proposed truce resolution, particularly at whether Israeli troops would be able to stay in south Lebanon until they can hand over to a multinational force. French

President Jacques Chirac appealed for rapid agreement.

In a televised speech Wednesday night, Sheik Hassan Nasrallah, the Hezbollah chief, rejected as "unfair and unjust" a draft U.N. resolution that would temporarily let Israeli troops remain in south Lebanon and take defensive action.

"It has given Israel more than it wanted and more than it was looking for," he said.

The Israeli government's decision came two days after Lebanon offered to send 15,000 soldiers to patrol the border region, a key Israeli demand intended to prevent future attacks on Israel. The current fighting began when Hezbollah fighters raided Israel July 12, killed three soldiers and captured two others.

In a major shift, Nasrallah said Hezbollah supported an army deployment, after a cease-fire is declared and Israel leaves.

Israeli officials remained skeptical of the Lebanese offer and were not convinced Lebanon's army would take concrete action to stop future Hezbollah attacks.

"It is important that the Lebanese army will be accompanied by an international force that will enable it to reach the south in an organized manner, and to leave the place clean of Hezbollah," Israeli Foreign Minister Tzipi Livni said.