Hezbollah leader Hassan Nasrallah said on Wednesday the conflict with Israel had entered a new phase and that the guerrilla group would not accept any "humiliating" conditions for a ceasefire.
In a televised address, Nasrallah said Israeli incursions into southern Lebanon would not stop Hezbollah rocket fire into northern Israel and that the conflict was moving "beyond Haifa".
The radical Islamic group head said Israel's offensive in Lebanon was part of a conspiracy with the U.S. to create a new Middle East.
"In the new Middle East, there is no place for any resistance movement. The resistance movements in Palestine and Lebanon must be eliminated," Nasrallah added.
On Tuesday night, a senior Hezbollah official said the guerrillas did not expect Israel to react so strongly to its capture of two Israeli soldiers last month.
Mahmoud Komati, the deputy chief of the Hezbollah politburo, also told The Associated Press that his group will not lay down arms.
His comments were the first time that a leader from the Islamic militant group has suggested it miscalculated the consquences of the July 12 cross-border raid that seized the two.
"The truth is - let me say this clearly - we didn't even expect (this) response.... that (Israel) would exploit this operation for this big war against us," said Komati.
He said Hezbollah had expected "the usual, limited response" from Israel.
In the past, he said, Israeli reponses to Hezbollah actions included sending in commandos into Lebanon and kidnapping Hezbollah officials or briefly targeting specific Hezbollah strongholds in southern Lebanon.
He said his group had also anticipated negotiations to swap the soldiers with three Lebanese prisoners in Israeli jails, with Germany acting as a mediator as it has in past prisoner exchanges.
Komati also gave higher casualty figures for the guerrillas than the 11 the group has reported so far in the 13-day-old conflict. He said that as of Monday 25 were killed, including 17 in ground fighting with Israeli troops assaulting several south Lebanese border towns since the weekend.
Later Tuesday, Hezbollah announced the deaths of two more guerrillas in the border fighting, bringing the total toll to 27.
Israel has said Hezbollah is greatly underreporting its casualties. IDF senior officer, Brig. Gen. Udi Nehushtan, said Tuesday in Jerusalem that "some dozens" of Hezbollah fighters have been killed in past two weeks.
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