General Alon Friedman, one of Israel's senior commanders in the northern region, said on Tuesday: "Bint Jbeil is in our hands."

Bint Jbeil lies less than 10km north of the strategic village of Marun Al-Ras, which the Israeli army captured at the weekend.

Friedman told the Israeli Radio that troops and tanks were in control of the town of Bint Jbeil.

"Our aim in Bint Jbeil is to destroy the infrastructure of Hezbollah and to liquidate that organisation's terrorists in order to reduce the [rocket] attacks on the north," he said.

Fierce fighting raged in the area with Hezbollah fighters on Monday as Israeli forces pushed deeper into its northern neighbour.

The Israeli military confirmed that two of its soldiers were killed in battles near Bint Jbeil, while other reports put the toll at four. Fourteen other soldiers were wounded, six reportedly by friendly fire.

The deaths brought to 41 - 24 servicemen and 17 civilians - the number of Israelis killed since the current troubles started on July 12.

Israeli aircraft have demolished a house in the market town of Nabatiya, 25km north of Bint Jbail, killing seven civilians.

Hospital and security officials said the attack had killed the house's owner, Saad Hamza, his wife and two sons, and three other males.

Hamza's daughter was seriously injured in the raid and the wife of one of the men killed remained under the rubble.

It was not known if the woman under the debris was alive.