Israel and Hezbollah traded fire Friday after the United States and its allies failed to secure a halt in clashes that have killed more than 700 people in Lebanon this week.

With top Israeli ministers rejecting a 21-day truce proposal, the spotlight is now on Prime Minister Benjamin Netanyahu who is due to address the UN General Assembly later in the day.

Hezbollah and Israel have been locked in a deadly exchange of cross-border fire since the Iran-backed group's Palestinian ally, Hamas, attacked Israel on October 7.

Nearly a year into the war with Hamas in Gaza, Israel shifted its focus to its northern front with Lebanon.

Since Monday, Israeli warplanes have bombarded Hezbollah strongholds around the country, sparking an exodus of around 118,000 people, according to the UN.

On Friday, Lebanon's National News Agency said Israeli air strikes had intensified overnight, and that one strike had killed a family of nine in south Lebanon.

Hours later, Hezbollah fired rockets into the north Israeli city of Tiberias, saying it was responding to "savage" strikes on Lebanese towns and villages.

In nearly a year of violence, more than 1,500 people have been killed in Lebanon, according to the country's disaster management unit.

That toll surpasses the 1,200 mostly civilians killed during the 2006 war between Israel and Hezbollah, which also killed around 160 people in Israel, most of them soldiers.

Since Monday alone, more than 700 people have been killed in Lebanon, according to the health ministry.

"Everything is collapsing around us," said Lebanese businessman Anis Rubeiz, 55.

"People are tired mentally... I don't see (hope) on the horizon... or even a ray of light."

The exchanges of fire came after the United States, France and other allies unveiled a truce proposal, after President Joe Biden and his French counterpart, Emmanuel Macron, met on the sidelines of the UN General Assembly in New York.

But Israeli Foreign Minister Israel Katz rejected the push, vowing to keep fighting Hezbollah militants "until victory".

Netanyahu's office said he had "not even responded" to the proposal, and that he had ordered the military "to continue the fighting with full force".

The White House expressed frustration at the rejection, saying the truce proposal had taken "a lot of care and effort".

Macron said later it was "a mistake" for Netanyahu to refuse a ceasefire and that he would have to take "responsibility" for a regional escalation.

Hezbollah, for its part, has not commented on the truce proposal.

Netanyahu in New York

With no end to the battle in sight, Netanyahu is due to address world leaders attending the UN General Assembly session that starts at 1pm GMT.

Netanyahu on Wednesday reiterated his pledge to keep fighting Hezbollah until Israelis displaced by nearly a year of cross-border fire can return home.

"We are striking Hezbollah with blows it never imagined. We are doing this with full force, we are doing this with guile. One thing I promise you: we will not rest until they return home", he said.

In New York, US Secretary of State Antony Blinken met with Israel's strategic affairs minister on Thursday, telling him a ceasefire would "allow civilians on both sides of the border to return to their homes".

"Further escalation of the conflict will only make that objective more difficult," his spokesman Matthew Miller said in a statement.

The Israeli defence ministry meanwhile announced it had secured a new $8.7 billion aid package from the United States to support the country's ongoing military efforts.

Hezbollah commander killed

For the fourth time in a week, Israel carried out a strike on Hezbollah's south Beirut stronghold, killing Mohammed Srur, the head of Hezbollah's drone unit.

Hezbollah will hold a funeral ceremony for Srur on Friday.

The Lebanon battle has raised fears of wider turmoil in the Middle East, with Iran-backed militants across the region vowing to keep up their fight with Israel.

On Thursday, the Israeli military said it intercepted a missile fired from Yemen.

The leader of Yemen's Huthi rebels, Abdul Malik al-Huthi, said in a televised address Thursday that the Iran-backed group would "not hesitate to support Lebanon and Hezbollah".

An Israeli air strike on Lebanon's border with Syria killed five Syrian soldiers, according to state news agency SANA.

Iran is a key ally of Syria, where it has helped prop up President Bashar al-Assad since the start of the civil war in 2011.

Iran is walking a tightrope by supporting Hezbollah without being dragged into a full-blown conflict and playing into its enemy's hands.

"Iran is not going to be pulled into war," said Hamid Gholamzadeh, an Iran-based political expert.

Gaza key

Diplomats have said efforts to end the war in Gaza were key to halting the fighting in Lebanon and bringing the region back from the brink of all-out war.

But despite months of mediation efforts, a Gaza ceasefire remains elusive.

Hamas's October 7 attack resulted in the deaths of 1,205 people, mostly civilians, according to an AFP tally based on Israeli official figures that include hostages killed in captivity.

Of the 251 hostages seized by militants, 97 are still held in Gaza, including 33 the Israeli military says are dead.

Israel's retaliatory military offensive has killed at least 41,534 people in Gaza, most of them civilians, according to figures provided by the Hamas-run territory's health ministry. The UN has described the figures as reliable.

AFP