BEIRUT, Lebanon (AP) – Israeli troops clashed with Hezbollah guerrillas on the Lebanese side of the border Wednesday, while Lebanon’s prime minister reported a death toll of 300 and demanded compensation from Israel for the “unimaginable losses” to the nation’s infrastructure.

As fighting entered its second week, Israeli warplanes flattened houses in south Lebanon and Hezbollah rockets made their first hit near Christian holy sites in Israel: Two rockets hit Nazareth _ the biblical hometown of Jesus _ killing two brothers ages 3 and 9 as they played outside, bringing the Israeli death toll to 29. At least 18 others were wounded in the attack.

Washington said it won’t push Israel toward a fast cease-fire in the fighting, started July 12 after Hezbollah guerrillas captured two Israeli soldiers. The latest fighting dealt a blow to efforts to send international peacekeepers to bolster the 2,000-member U.N. force in south Lebanon.

As the conflict intensified, more than 1,000 Americans were evacuated Wednesday from Beirut’s port aboard a luxury cruise liner, the first large pullout by the United States after complaints of delays. European nations three days ago sent ships to evacuate thousands. Two U.S. Chinook helicopters also took 200 Americans to Cyprus.

Addressing foreign ambassadors, including U.S. Ambassador Jeffrey Feltman, Prime Minister Fuad Saniora gave the first official death toll in the conflict, saying also that 1,000 have been wounded and a half-million displaced.

He made an urgent appeal for an end to the fighting, saying Lebanon “has been torn to shreds.”

In a swipe particularly at the United States, Saniora asked: “Is this what the international community calls self-defense? Is this the price we pay for aspiring to build our democratic institutions?”

The International Red Cross, along with the U.N. children’s and health agencies, expressed serious concern about civilian casualties and health risks from the violence.

Hezbollah claimed to have “repelled” Israeli forces near the coastal border town of Naqoura, and the Israeli army said two of its soldiers were killed and nine were wounded in the battle. Hezbollah said one guerrilla was killed.

Israeli bombers, previously focusing on Hezbollah strongholds in southern Beirut, hit a Christian suburb on the eastern side of the capital for the first time. The target was a truck-mounted machine used to drill for water that could have been mistaken for a missile launcher. The vehicle was destroyed, but nobody was hurt.

Israel, which has mainly limited itself to attacks from the air and sea, had been reluctant to send in ground troops because Hezbollah is far more familiar with the terrain and because of memories of Israel’s ill-fated 18-year occupation of south Lebanon that ended in 2000.

Israel said its airstrikes had destroyed about half of Hezbollah’s arsenal. “It will take us time to destroy what is left,” Brig. Gen. Alon Friedman, a senior army commander, told Israeli Army Radio.

On another front, Israeli forces killed six Palestinians after tanks moved into the Mughazi refugee camp in central Gaza, the latest incursion in Israel’s three-week military push in the seaside territory. In the West Bank city of Nablus, at least three Palestinians were killed when the army surrounded a prison where militants were apparently hiding, Palestinian officials said.

Israel began large-scale operations in Gaza on June 28, three days after Hamas-lined militants tunneled under the border and attacked an Israeli army base, killing two soldiers and capturing a third.

Despite international appeals, the Bush administration has refused to press Israel for a prompt end to its campaign against Hezbollah. Instead, Secretary of State Condoleezza Rice is trying to drum up support for what she called a cease-fire of “lasting value” _ one that envisions the Lebanese army taking over the south, where guerrillas have waged a cross-border war against Israel for years.

Rice will discuss the Mideast on Thursday evening in New York with U.N. Secretary-General Kofi Annan and the European Union foreign policy chief, a U.N. official said.

She is likely to visit the region this weekend. State Department spokesman Sean McCormack said only that her trip would come “in the near future,” telling CNN the timing would depend upon “when she thinks it’s most useful and most effective.”

British Prime Minister Tony Blair also rejected calls for Israel to declare a unilateral cease-fire, insisting Hezbollah must first free the captured Israeli soldiers and stop firing rockets at the Jewish state.

President Bush also has turned his attention to Hezbollah-backer Syria, saying he suspects it was trying to reassert influence in Lebanon more than a year after withdrawing troops under U.N. pressure.

“It’s in our interest for Syria to stay out of Lebanon and for this government to survive,” Bush said, referring to Saniora’s fledgling administration.

“Syria’s trying to get back into Lebanon, it looks like, seems to me,” he said. “The world must deal with Hezbollah, with Syria and to continue to isolate Iran.”

Israel stressed it did not plan to target Iran or Syria, Hezbollah’s key sponsors.

“We will leave Iran to the world community, and Syria as well,” Vice Premier Shimon Peres told Army Radio. “It’s very important to understand that we are not instilling world order.”

The Red Cross said it was “extremely concerned about the grave consequences” the fighting was having on civilians; it reminded both sides of their obligation to distinguish between civilians and military personnel and targets.

In Wednesday’s fighting, five people were killed when a missile hit a neighborhood in the southern Lebanese town of Nabatiyeh, officials said. The target was a commercial office of a firm belonging to Hezbollah, but those killed were residents.

In the village of Srifa, near Tyre in southern Lebanon, the airstrikes flattened 15 houses. Village leader Hussein Kamaledine said 25-30 people lived in the houses, but it was not known if they were at home. Many people have fled southern Lebanon.

“This is a real massacre,” Kamaledine told Al-Manar TV as firefighters put out the blaze and rescuers searched for survivors.

In the southern village of Ghaziyeh, one person was killed and two were wounded when a missile struck a nearby building housing a Hezbollah-affiliated social institution.

In the eastern Bekaa Valley, four people were killed and three were wounded in an air raid on the village of Loussi, police said. The planes also hit Beirut’s southern suburbs, a Hezbollah stronghold.

More Israeli missiles landed in two towns outside Beirut _ Chuweifat and Hadath. One person was killed at the Galerie Semaan junction, near Hadath, police said.

Israeli military officials said small numbers of soldiers have been going in and out of south Lebanon for days in search of Hezbollah bases and weapons. The officials, speaking on condition of anonymity, would not give the number of troops involved or their location.

Israel’s ambassador to the United Nations, Dan Gillerman, said the incursion was not large scale.

“This is an operation which is very measured, very local,” Gillerman told CNN. “This is no way an invasion of Lebanon. This is no way the beginning of any kind of occupation of Lebanon.”

Last week, Hezbollah leader Sheik Hassan Nasrallah vowed to defeat any Israeli invasion. “Any ground invasion will be good news for the resistance because it will bring us closer to victory and humiliating the Israeli enemy,” he said.