ISRAEL was today accused by the United Nations of shooting dead the driver of one of its aid trucks during a temporary ceasefire to allow humanitarian supplies into Gaza.

A UN spokesman said the vehicle had come under fire despite being marked with its flag and insignia.

The incident will heighten concern about the conduct of Israeli forces inside Gaza. Earlier this week Israeli shellfire killed up to 42 people sheltering near a UN school in an an attack which produced an angry condemnation from United Nations officials.

The Israeli army said it was investigating today's shooting but had no further immediate comment.

At least three rockets were fired from Lebanon into Israel today. One of the Katyusha rockets injured two people after hitting a nursing home in the Israeli border town of Nahariya and exploding in the kitchen as about 25 elderly residents were eating breakfast. The Israeli military, which said that it had pinpointed the source of the firing, retaliated by launching artillery shells into Lebanon.

The exchange of fire will raise fears that Israel's conflict in Gaza could be about to escalate alarmingly and lead to fighting on both its southern and northern borders. Israeli officials tried to calm the anxieties by suggesting that the attacks were an “isolated event” and not the start of a potentially dangerous new conflict with the Hezbollah guerilla force, which is based in Lebanon.

Lebanese officials also insisted that Hezbollah, which fought a 34-day war with Israel in 2006, was not responsible and blamed the rockets on Palestinian militants sheltering in the country.

Hezbollah leader Hassan Nasrallas warned of ferocious retaliation by his fighters if Israel attacks. “The Zionists will discover that the war they had in July [2006] was a walk in the park if they compare it to what we've prepared for every new aggression,” he said before today's rocket attack.

Israel launched about 60 air strikes on Gaza overnight in a bid to destroy Hamas arms smuggling tunnels, rocket launching pads and weapons storage sites.

The conflict is in its 13th day and the Palestinian death toll is almost 700. Ten Israelis, including three civilians, have died.

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