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Prime Minister Ehud Olmert was to convene Wednesday night his "Forum of Seven" - a sort of wartime mini-cabinet - to discuss Israel's next steps in Lebanon.

The forum includes Defense Minister Amir Peretz, Foreign Minister Tzipi Livni, Vice Premier Shimon Peres, Public Security Minsiter Avi Dichter, Industry and Trade Minister Eli Yishai and Transportation Minister Shaul Mofaz.

The American initiative to end the Lebanon conflict includes an Israeli withdrawal from the Shaba Farms, the pan-Arab newspaper Al-Hayat reported Wednesday.

According to the report, Secretary of State Condoleezza Rice included Shaba Farms in the plan following pressure from high ranking Lebanese officials, headed by Prime Minister Fouad Siniora.

The initiative put forward by Rice during her trip to the region Monday and Tuesday, the Shaba Farms area will be transferred to Lebanon, but the local border will not be set if Syria persists in its opposition to such a move. Following the transfer to Lebanese authority, the Shaba Farms area will be the responsibility of the United Nations.

Israeli sources said, however, that Rice had acknowledged the Shaba Farms region as one of the excuses given by the Lebanese government for its failure to act, but said she did not include an Israeli withdrawal in her demands.

Israel seized the mountainous region from Syria in the 1967 Six-Day War, along with the neighboring Golan Heights.

The area is now claimed by Beirut, with the consent of Damascus. The UN, however, has maintained that the Israeli withdrawal from southern Lebanon in May 2000 was complete, and that any negotiations conducted over the area should be between Israel and Syria.

International force will help Lebanese army deploy

The role of the international force that will be sent to Lebanon following a cease-fire will be to assist the Lebanese army to deploy in the south, ensure that Hezbollah does not rebuild its positions there and ensure that quiet is maintained along the Israeli-Lebanese border, U.S. Secretary of State Condoleezza Rice and Prime Minister Ehud Olmert agreed Tuesday.

However, government sources said, this force will not be responsible for disarming Hezbollah nor will it be stationed at the border crossings between Lebanon and Syria in order to halt the flow of weapons from Syria to Hezbollah.

Israel has thereby in effect conceded its initial demands that any cease-fire deal include stripping Hezbollah of its rockets and ensuring that it is not rearmed.

The Lebanese government wants any international force to be a United Nations force. Israel prefers that it operate under a UN mandate, but not under the UN's command. The U.S. government is currently drafting a new Security Council resolution that will define the force's goals and powers. That resolution would replace Resolution 1559, which called for disarming Hezbollah and deploying the Lebanese army in the south. The new resolution will also call for Hezbollah's disarmament, but it is not clear who will enforce this provision.

The international force will be deployed in two stages: an intervention force that will arrive within 60 days, followed later by the main force. CNN, citing Lebanese sources, said that the force will initially comprise 10,000 Turkish and Egyptian soldiers, and will later expand to 30,000 troops from several countries.

Due to the talk about a new international force, the Security Council is likely to extend the mandate of UNIFIL, the current UN force in Lebanon, by only another month, instead of the usual six months, UN sources said. UNIFIL's current mandate expires on July 31.

Rice will attend an international conference in Rome on Wednesday to discuss the Lebanon crisis. Government sources predicted that UN Secretary General Kofi Annan will tell the conference that any new arrangement in Lebanon must resolve the problem of Shaba Farms, a piece of Israeli-occupied territory that Beirut claims is Lebanese, but the UN says is Syrian. Rice raised this issue with Olmert on Tuesday, noting that the Lebanese government uses Israel's continued control over Shaba to excuse its weakness.

The IDF General Staff is currently considering expanding its Lebanon operation to include seizing control of territory, instead of just raiding villages.

That would require an additional call-up of the reserves. However, such an expansion has not yet been approved.

Defense Minister Amir Peretz said during a visit to the North on Tuesday that Israel intends to set up a "security zone" in southern Lebanon.

However, his office later said that what he meant was not a permanent Israeli presence, but a kilometer-wide strip north of the border that Hezbollah operatives would be forbidden to enter following the IDF's withdrawal. The ban would be enforced by firing from IDF positions within Israel.