The rockets, fired from over the border in south Lebanon, hit an area near a kibbutz close to the town of Kfar Giladi in the Galilee region.

Ten people were killed on the spot and one died later from injuries received, police and medical sources said. Three people were seriously wounded and 20 lightly wounded.

The Arabic news channel Al-Jazeera said those killed were reserve soldiers stationed in the area, but the Israeli army did not confirm this.

Hezbollah militants have fired more than 2,700 missiles at northern Israel since the start of the conflict on July 12, causing about a quarter of a million people to flee south out of rocket range.

Israeli Prime Minister Ehud Olmert, who was chairing the weekly cabinet meeting at the time of the attack on Kfar Giladi, called the incident "very grave" and vowed that "we will continue fighting as long as is necessary".

The latest attack brings to 44 the number of Israelis killed by rockets since the start of the Lebanon offensive. Forty-six soldiers have also been killed, most of them in combat.

Witnesses said the rockets had slammed into the Kfar Giladi area in quick succession.

"A rocket landed right between those cars," said a soldier at the scene as he pointed to the burnt-out remains of vehicles.

"It's carnage," said another soldier as his colleagues scoured the ground for body parts.

Military ambulances quickly arrived on the scene after the first rockets struck and began removing the dead and wounded as further missiles fell, said a spokesman for the Magen David Adom, the Israeli equivalent of the Red Cross.

Israeli television showed footage of the wounded being carried on stretchers by soldiers for evacuation by military helicopter.

The bodies of those killed were covered with sheets and laid out alongside each other near the kibbutz cemetery.

A spokeswoman from the kibbutz said the dead were not members of the community.

Fires caused by the rockets blazed in nearby fields as ambulances with sirens blaring came and went from the area.

According to police spokesman Mickey Rosenfeld, 140 rockets had been fired from Lebanon into Israel by early evening on Sunday. Twenty-eight of them hit populated areas, he said.

Last week, Olmert assured the nation that the offensive against Hezbollah in Lebanon had significantly weakened the group, which Israel says has been armed and trained by Syria and Iran.

But the Shiite militia, which was created after Israel's 1982 invasion of Lebanon, has continued to fire deadly salvos into the Jewish state.

Israeli intelligence estimates Hezbollah has around 9,000 missiles while the group's chief Hassan Nasrallah has said it has 12,000.

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