Hezbollah also struck Israel's third largest city of Haifa, killing three people and wounding 160.

The rockets which killed the soldiers, fired from over the border in south Lebanon, hit an area near a kibbutz outside Kfar Giladi in the Galilee region.

All the victims were members of a reserve infantry unit who were camping close to the kibbutz, the army said.

Five soldiers were also wounded, two of them seriously.

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 deaths bring to 58 the number of soldiers who have been killed since Israel began its offensive. Most have died in combat.

Thirty-six Israeli civilians have been killed in rocket attacks since the start of the Lebanon offensive.

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.

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

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.

One building collapsed in Sunday's deadly attack on Haifa, said emergency services.

Israeli television broadcast pictures of the collapsed building on fire with rescuers frantically attempting to free survivors from the debris with their bare hands.

A second building was also hit by the rockets.

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

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