HAIFA, Israel (AP) – Lebanese guerillas fired a relentless barrage of rockets into the northern Israeli city of Haifa during morning rush hour Sunday, killing eight people at a train station and wounding seven others in a dramatic escalation of a five-day-old conflict that has shattered Mideast peace.

Hezbollah’s firing of at least 20 rockets at Haifa came after Israel unleashed its fiercest bombardment yet of the Lebanese capital, starting after midnight Saturday. The attack reduced Beirut apartment buildings to rubble and knocked out electricity in many areas of the city.

Within two hours of the 8 a.m. Haifa attack, Israel warplanes retaliated with at least six airstrikes on southern Beirut, blasting the Hezbollah headquarters building and sending a thick smoke cloud over the city.

U.S. officials were monitoring violence in Lebanon hour-by-hour to decide whether to evacuate an estimated 25,000 Americans, possibly to the neighboring Mediterranean island of Cyprus. About 350 people _ most of them Europeans _ were evacuated Saturday night and early Sunday from Lebanon to Cyprus on Italian military flights.

Israeli Prime Minister Ehud Olmert said there would be “far-reaching consequences” for the Haifa attack. Black smoke rose over the city. Air-raid sirens wailed as the dead and wounded were evacuated. Rockets also hit an oil refinery, gas storage tanks and a busy street during morning rush hour.

Israeli authorities put residents across the north and in the central city of Tel Aviv on heightened alert, reflecting the longer range of the missile attacks. They blamed Syria and Iran for providing guerrillas with more sophisticated weaponry, raising the specter of a wider regional confrontation.

At the Vatican, Pope Benedict XVI expressed grave concern over the escalation of fighting in Lebanon and denounced terrorism and retaliation in the Holy Land.

Sunday brought the fiercest attacks since the conflict erupted Wednesday after Hezbollah guerillas penetrated Israel in brazen raid, killing eight soldiers and capturing another two.

The fighting opened a second front for Israel, which was already battling Hamas-linked Islamic militants in the Gaza Strip following the capture of an Israeli soldier June 25. With the expanding crisis, Israel expanded its mission from the immediate need to free the three soldiers to a campaign to halt rocket fire from Gaza and to neutralize Hezbollah in Lebanon.

Israeli troops, tanks and helicopter gunships re-entered northern Gaza on Sunday, firing missiles and exchanging gunfire with armed Palestinians, killing three of them.

Masked militants in Gaza vowed Sunday to launch more rockets at Israel “to show solidarity with the twin of our resistance,” referring to Hezbollah.

The Haifa attack raised Israel’s death toll in the fighting to at least 24, half of them civilians. Most of the 130 people killed by Israeli airstrikes in Lebanon also were civilians.

Iran and Syria are prime supporters of Hamas and Hezbollah, and Syrian Information Minister Mohsen Bilal warned that any aggression against it “will be met with a firm and direct response whose timing and methods are unlimited.”

Iran on Sunday again denied Israeli claims that it had troops in Lebanon and that it helped Hezbollah attack an Israeli warship on Friday, saying the guerrilla group could fend for itself without outside help.

Initially, it was believed that an unmanned drone laden with explosives had hit the Israeli warship; it later became clear that Hezbollah used what Israel described as an Iranian-made, radar-guided C-802 missile.

The army said Sunday that three sailors missing after the gunship attack were dead, raising the number of Israeli sailors killed in the attack to four.

The Islamic Republic also warned that expanding Israel’s bombing raids to neighboring Syria would bring the Jewish state “unimaginable damages.”

“Iran stands by the people of Syria,” Foreign Ministry spokesman Hamid Reza Asefi said.

Hezbollah said it hit Haifa, Israel’s third-largest city, with dozens of Raad-2 and Raad-3 missiles. But Israeli officials said Hezbollah _ previously using relatively small Katyusha rockets _ also launched at least four Iranian-made Fajr missiles, its first use of the weapons. The missiles have a range of 28 miles and a far larger warhead than Katyushas.

Shaul Mofaz, an Israeli Cabinet minister and former army chief of staff, blamed Syria. “The ammunition that Hezbollah used this morning … is Syrian ammunition,” he said. He compared Hezbollah to al-Qaida, saying Israel should mount its operation accordingly.

One of the rockets hit the section of the Haifa station where crews perform maintenance on the trains, tearing a huge hole in the roof. About 30 people were working at the time, Ofer Litzevski, a train company official, said.

At the scene a body lay on a stretcher in a white bag.

Haifa Mayor Yona Yahav warned people against holding large gatherings and canceled all cultural events. Trains and buses were halted across northern Israel.

Hezbollah said it intentionally avoided hitting petrochemical installations in Haifa, according to a statement read on Al-Manar television, the Islamic guerrillas’ main voice to the world.

“But the next time, it (Hezbollah) will not spare anything in Haifa and its surroundings,” the statement said.

Israel had deployed a Patriot missile battery in Haifa on Saturday to protect against surface-to-surface missiles. But the Patriot was not built to combat the kind of missiles that hit on Sunday, said Brig. Gen. Ido Nehushtan, a member of the army’s General Staff.

Rockets fired by Lebanese militants also struck Acco, Nahariya and several other northern towns, and residents of the region were told to head to bomb shelters. Israeli rescue teams said 20 people were wounded in Haifa and Acco, four of them seriously.

Israel’s overnight attacks on Lebanon briefly knocked Al-Manar TV off the air. The Jiyeh power plant was in flames after being hit at about 6 a.m., cutting electricity to many areas in Beirut and south Lebanon.

Large sections of the capital were covered in fine white dust from the barrage. Fires raged, and heaps of rubble and twisted metal covered entire city blocks near the Hezbollah compound in Beirut’s southern district, known as Dahiyah. The steel gates of the compound were mangled.

One building was collapsed on its side; other apartment buildings were reduced to rubble or had their upper floors collapsed into those below. Broken furniture, blankets, mattresses, clothes and stuffed toys were scattered on the streets.

The Dahiyah district was empty except for guerrillas and a few residents who returned to collect belongings before taking refuge elsewhere.

“We want to sleep on our own pillows in the shelter,” Mariam Shihabiyah, a 39-year-old mother of five said as she emerged from scrounging supplies from her wrecked apartment. “I just want them and our clothes, that’s all … Can you believe what happened to Dahiyah?”

A copy of the Quran, Islam’s holy book, lay in the street, its dusty pages fluttering. A Hezbollah gunman picked it up reverently lifted and kissed it.