The Israeli security Cabinet today voted to mobilise 30,000 more reserve troops to press home its military attack on Lebanon, after interpreting yesterday's international failure to agree a ceasefire call as a green light.

But there will be no massive ground assault against Hezbollah yet, the Cabinet decided, preferring that the Israeli army should continue its current limited incursions into the dangerous zone north of the Lebanese border.

The cautious move was anticipated by Israeli newspapers this morning, which claimed that the deaths of nine soldiers in an ambush at Bint Jbeil yesterday - Israel's heaviest single casualty toll in its 16-day campaign against Hezbollah guerrillas - had unnerved Ehud Olmert, the Israeli Prime Minister.

The Cabinet said that the call up of three additional reserve divisions was meant mainly to refresh the existing troops in Lebanon. But the huge size of the mobilisation raised questions about the military’s future strategy.

"The draft is to prepare the force for possible developments as they have been presented to the Cabinet, and also to freshen the forces as needed. Using the force will require another approval by the Cabinet," said a statement from Mr Olmert's office after the Cabinet meeting.

Senior military commanders have been pushing for a wider campaign in Lebanon, but Amir Peretz, the Defence Minister, favours limited action, officials said. Israel Radio said that ministers made clear they had no intention of widening the conflict to confront Syria, which backs Hezbollah.

A political source confirmed after the Cabinet meeting broke up: "It was decided to continue the offensive with the same strategy, using pinpointed ground incursions and air strikes, not to bring in massive forces. At the moment the army is not bound by time, it can act as long as needed."

Israel has taken heart from the failure of yesterday's 15-nation conference in Rome attended by Condoleezza Rice and Kofi Annan to agree a ceasefire call.

"We received yesterday at the Rome conference permission from the world .... to continue the operation, this war, until Hezbollah won’t be located in Lebanon and until it is disarmed," Haim Ramon, the hawkish Israeli Justice Minister, told Israel Army Radio. "Everyone understands that a victory for Hezbollah is a victory for world terror."

But this afternoon the European Union said that Israel's interpretation of the Rome conference was "totally wrong" and that Middle East hostilities should halt immediately.

Ian McKinnon, Times Jerusalem Correspondent, said that public opinion in Israel was still pushing Mr Olmert and his ministers firmly in favour of war.

"The editor-in-chief of Maariv newspaper says today in a front page column that the time has come for Israel to wage war in the Lebanese border villages without caring for the consequences, and not to be afraid to send soldiers into difficulty and danger in fraught hand-to-hand combat without caring how many people get killed."

Meanwhile the fighting continued, with Israel launching multiple air strikes overnight and this morning, carrying out more than 30 bombing runs on Iqlim al Tuffah, a mountainous region where Hezbollah is believed to have bases.

A number of people were reported wounded, but ambulances have so far been unable to reach the casualties because of the intense bombardment, Lebanese officials said.

Israeli planes also attacked targets near Nabatiyah, in the south, wounding three people.

Jan Egeland, the UN under-secretary-general for humanitarian affairs, told the BBC that the UN was "fearful" for the safety of UN aid convoys in Lebanon, although Israel has promised to allow safe passage to aid for Lebanon's estimated 750,000 refugees from the fighting.

Dozens of rockets fired by Hezbollah guerrillas hit towns across northern Israel today, striking a chemical factory in the town of Kiryat Shemona, and wounding at least one person, emergency services said. Hezbollah has fired more than 1,400 rockets at Israel since July 12.

In Gaza today, a Palestinian man and a 75-year-old Palestinian woman were killed by Israeli shelling. The Middle East crisis began in Gaza in June, when Hamas militants raided an army post in Israel and kidnapped a soldier. The conflict escalated to Lebanon when Hezbollah fighters mounted a raid kidnapping two Israeli soldiers, and started to fire rockets at Israel.

In other developments, Condoleezza Rice, speaking from a conference in Kuala Lumpur, said today that she was willing to return to the Middle East for another round of diplomacy in an attempt to keep up pressure for a sustainable ceasefire.

Australia today registered its concern at Israeli actions, including the killing of four UN peacekeepers during heavy bombing on Tuesday, by pulling out 12 unarmed logistical support experts it had sent to help supervise the evacuation of south Lebanon.

It emerged yesterday that UN observers in Lebanon had telephoned the Israeli military 10 times in six hours to ask it to stop shelling near their position before the attack that killed the four observers. Israel has apologised and promised an inquiry into the incident.

John Howard, the Australian Prime Minister, said that his country would not support a multinational peacekeeping force for the area - one of the few initiatives to emerge from the Rome conference - unless it had the strength and will to disarm Hezbollah.

A Belgian couple evacuated from their Beirut holiday apartment last week are reported to be bringing a prosecution against Israel for war crimes, over its bombing campaign in southern Lebanon.

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