Jerusalem ? Israel’s government decided Thursday not to expand its battle with Hezbollah in southern Lebanon for now but authorized the army to call up 30,000 reserve soldiers in case the fighting intensifies. Lebanese officials estimated a civilian death toll as high as 600.

With Hezbollah allies Iran and Syria reportedly meeting in Damascus to discuss the crisis, Secretary of State Condoleezza Rice said she was “willing and ready” to return to the region to work for a sustainable peace agreement.

But President Bush suggested he would support the offensive for as long as it takes to cripple Hezbollah. He also sharply condemned Iran for its support of the Shiite Muslim militant group.

The call-up signaled that Israel was settling in for a much longer battle than initially had been expected, one that could grow far bloodier if Israel decides its air attacks and small-scale invasion into Lebanon are not working and sends in thousands of more ground forces.

In recent days, senior Israeli generals urged the government to authorize a broader ground campaign in southern Lebanon, which they said would help the thousands of troops already engaged in bloody battles there.

Israel’s security Cabinet authorized the army to call up three additional reserve divisions to refresh the troops in Lebanon if they are needed but rejected the generals’ advice to expand the offensive.

An Israeli soldier atop an armored personnel carrier waves a captured Hezbollah flag while crossing the border into Lebanon. Israel pounded suspected Hezbollah positions across Lebanon on Thursday, extending its air campaign a day after suffering its highest one-day casualty toll since its military offensive began. The Israeli government also shelved plans to send more troops into the dangerous terrain.

However, Justice Minister Haim Ramon said the failure of world leaders to call for an immediate cease-fire at a summit in Rome gave Israel a green light to carry on with its campaign to crush Hezbollah – an assertion hotly rejected by European officials.

Wednesday’s conference ended in disagreement, with most European leaders calling for an immediate cease-fire and the United States wanting to give Israel more time to neutralize Hezbollah.

Israeli airstrikes Thursday on southern Lebanon struck roads and houses, many believed to be the deserted homes of Hezbollah activists, in the apple-growing region of Iqlim al-Tuffah. The strikes caused casualties, but fighting kept ambulances and civil defense crews from the areas, security officials and witnesses said.

Other strikes hit a Lebanese army base in the north, while artillery and warplanes pounded the area near the border, according to witnesses. However, the fierce ground battles that raged Wednesday for the border towns of Bint Jbail and nearby Maroun al-Ras appeared to have abated, with U.N. observers reporting only “sporadic fighting” there.

Israeli Defense Minister Amir Peretz said the strategic damage to Hezbollah was “enormous” and said the group would “not return to what it was.”

Israel launched its offensive in Lebanon on July 12, after Hezbollah guerrillas overran the border, killed three Israeli soldiers on patrol and captured two others.

The army broadcast a warning on its Arabic-language radio station Thursday telling Lebanese in the south that their villages would be “totally destroyed” if rockets were fired from them.

Army Chief of Staff Dan Halutz said there had been hundreds of Hezbollah casualties and that “we have caused serious damage to their rocket-launching capabilities.”

But Lebanese President Emile Lahoud, a staunch supporter of Hezbollah, said Israel would never be able to crush the group militarily, and should stop fighting and start talking.

“Whatever it (Israel) does it’s not going to reach its goal,” he said. “They’re not going to be able to take out the weaponry of Hezbollah. So all they’re doing is massive destruction.”

Meanwhile, al-Qaida issued its first response to the violence, threatening to retaliate with new attacks.

The videotape by Osama bin Laden deputy Ayman al-Zawahri was an effort by the terror network to rally Islamic militants by exploiting Israel’s two-pronged offensive – against Hezbollah in Lebanon and Hamas-linked militants in Gaza.

“We cannot just watch these shells as they burn our brothers in Gaza and Lebanon and stand by idly, humiliated,” al-Zawahri said, adding that “all the world is a battlefield open in front of us.”