Hezbollah has declared it is an “open-ended battle” with Israel as both sides appear to spiral closer toward all-out war.

Hezbollah fired more than 100 rockets across northern Israel on Sunday (local time), with some landing near the city of Haifa, as Israel launched hundreds of strikes on Lebanon.

The overnight rocket barrage was in response to Israeli attacks in Lebanon that have killed dozens, including a veteran Hezbollah commander, and an unprecedented attack last week targeting the military group’s communications devices.

Air raid sirens across northern Israel sent hundreds of thousands of people scrambling into shelters on Sunday.

One struck near a residential building in Kiryat Bialik, a city near Haifa, wounding at least three people and setting buildings and cars ablaze. Israel’s Magen David Adom rescue service said four people were wounded.

Lebanon’s Health Ministry said three people were killed and four wounded in Israeli strikes near the border, without saying whether they were civilians or combatants.

The rocket attacks followed an Israeli airstrike on Friday in Beirut that killed at least 45 people. Among them were Ibrahim Akil, one of Hezbollah’s top leaders, several other fighters and women and children.

Hezbollah was already reeling from a sophisticated attack that caused thousands of pagers and walkie-talkies to explode just days earlier.

But it faces a difficult balance of stretching the rules of engagement by hitting deeper into Israel, while at the same time trying to avoid large-scale attacks on civilian areas and infrastructure that could trigger a full-scale war that it would rather not start and take the blame for.

Hezbollah’s deputy leader Naim Kassem said Sunday’s rocket attack was just the beginning of what was now an “open-ended battle” with Israel.

“We admit that we are pained. We are humans. But as we are pained – you will also be pained,” Kassem said at Akil’s funeral.

He vowed Hezbollah would continue military operations against Israel but also warned of unexpected attacks “from outside the box,” pointing to rockets fired deeper into Israel.

Late on Sunday, Hezbollah announced a series of strikes on military sites in northern Israel with missiles and artillery shelling. It was not immediately clear if there were any casualties or damages.

Prime Minister Benjamin Netanyahu said Israel would take whatever action was necessary to restore security in the north and allow people to return to their homes.

“No country can accept the wanton rocketing of its cities. We can’t accept it either,” he said.

Seven people, including three women and two children, were buried in the southern Lebanese town of Mays al-Jabal, where Christian Lebanese lawmaker Melhem Khalaf said Israel “relies on the laws of the jungle instead international conventions, especially with protecting civilians”.

White House national security spokesman John Kirby told the US ABC’s This Week the US had been “involved in extensive and quite assertive diplomacy”.

“We want to make sure that we can continue to do everything we can to try to prevent this from becoming an all-out war there with Hezbollah across that Lebanese border.”

Israel says it thwarted an even larger Hezbollah attack

The Israeli military said it had struck about 400 militant sites, including rocket launchers, across southern Lebanon in the past 24 hours, thwarting an even larger attack.

“Hundreds of thousands of civilians have come under fire across a lot of northern Israel,” Israeli military spokesman Lieutenant Colonel Nadav Shoshani said.

“Today we saw fire that was deeper into Israel than before.”

The military also said it intercepted multiple aerial devices fired from the direction of Iraq, after Iran-backed militant groups there claimed to have launched a drone attack on Israel.

School was cancelled across northern Israel, and the health ministry said all hospitals in the north would move operations to protected areas in the medical centres.

-AAP