JERUSALEM - Israel on Sunday absorbed the heaviest blow of its nearly month-long war with Hezbollah, with a dozen reservists killed in a rocket strike at a military staging area and at least three people killed and dozens hurt by a volley that exploded in the heart of Haifa.

Amid the growing bloodshed, Israel signaled determination to seize the battlefield advantage while U.N. action is pending on a cease-fire proposal crafted by the U.S. and France.

Israeli warplanes struck targets across Lebanon, killing at least 20 people and injuring dozens. Near-constant artillery barrages thundered across the border.

Hezbollah guerrillas fired more than 160 rockets into northern Israel and fought Israeli troops in close-quarters combat in a string of villages close to the frontier.

U.S. Secretary of State Condoleezza Rice cautioned Sunday that the U.N. resolution may not curtail the fighting immediately.

“I would hope that you would see very early on an end to large-scale violence ... the firing of rockets that needs to stop for the next phase,” Rice said. But she added, “we can't rule out that there could be skirmishes for some time to come.”

Rice said she hoped for a vote on the resolution Monday or Tuesday.

Lebanese officials railed against the draft, saying that unless it is overhauled, it will do nothing to quell the warfare.

They complained that the language left the door open for Israel to keep up the crippling attacks and appealed for the international community to order Israel to remove its ground troops from southern Lebanon.

“It is against Lebanese interests and against peace,” Parliament speaker Nabih Berri, head of the Shiite Amal party, said of the document. “This draft proposal will keep the doors open for war.”

Mohammed Shatah, a senior aide to Lebanese Prime Minister Fouad Siniora, said the proposal lacked “immediate steps to make it stick.”

And Foreign Minister Walid Moallem of Syria, one of Hezbollah's main patrons, said on a visit to Beirut, Lebanon, that the plan was “a recipe for the continuation of the war.”

Israel maintained official silence on the proposal, which calls for an immediate end to hostilities and seeks to lay groundwork for a second resolution that would establish an international force to support the Lebanese army in the border zone. However, senior officials indicated that the government of Prime Minister Ehud Olmert considered the terms generally favorable.

In the meantime, Israel vowed to press ahead with its offensive, meant to purge Hezbollah from a four-mile-deep strip of southern Lebanon.

“We must continue the fighting, continue to hit whomever we can hit from Hezbollah,” Justice Minister Haim Ramon said on Israel's army radio.

Although the Israeli public still broadly supports the government's war aims, Sunday's rocket deaths staggered the country, not only because they represented the highest single-day toll since the start of the conflict, but because the circumstances were particularly painful.

The 12 Israeli soldiers were killed as they congregated at the entrance to Kfar Giladi, a border communal farm being used as a makeshift base by the military. The simultaneous deaths of so many reservists, citizen-soldiers who left jobs and families to rush to the war front, is an enormous blow to national morale, worsened by the fact that the deaths might have been prevented if the soldiers had taken cover when warning sirens sounded.

Haifa suffered a greater one-time loss of life July 16, when eight railway workers were killed in a rocket strike. But Israelis shuddered at televised scenes of chaos and panic in a vibrant city that is considered one of the country's jewels.

Sirens wailed, smoke billowed over the skyline and rescue workers scrambled to clear rubble to check for survivors.

Haifa has long been a city where Jews and Arabs live side by side, and all three of the dead were members of Israel's Arab minority. The dead included an elderly man and woman who were having coffee in the garden outside a building that took a direct hit. Arriving at the scene, the man's daughter wailed in Arabic: “Is father dead?”

While previous strikes on Haifa had been isolated, this one involved a concerted volley that hit one of the city's oldest neighborhoods, raising the specter of more rockets hitting densely populated areas in the city of nearly 300,000 residents.

“This attack in Haifa is precisely what Israel is trying to prevent. This is vivid proof of the necessity of Israel's (military) operation,” said David Baker, an official in the prime minister's office. “We will not allow Hezbollah to terrorize our cities.”

The day's events stoked fears of a surge in casualties while the Security Council prepares to vote on the proposed resolution as each side seeks to inflict heavy blows on the other and gain a potential edge in negotiations to come.

Nearly 600 Lebanese and 94 Israelis have died since the conflict erupted July 12 with a cross-border raid by Hezbollah in which two Israeli soldiers were captured.

In Lebanon, Israeli airstrikes ranged from Beirut's southern suburbs to the country's southern fringe. Three Chinese peacekeepers were wounded when the U.N. post they were manning was struck by a Hezbollah rocket, the U.N. peacekeeping forces announced.

The skyline above southern Beirut was a haze of acrid smoke late in the afternoon as nearly two dozen airstrikes and volleys from warships positioned offshore hit the neighborhoods of Bir al-Abed, Mesharafiya and Dahieh, setting at least 14 buildings ablaze.

Roads in and around Lebanon's southern port city of Tyre were nearly empty, and people who tried to navigate the streets risked their lives.

A man driving south toward Tyre, his a van stuffed with bread, was killed on a stretch of road through banana groves. His head was blown apart, and packages of bread, which has all but run out in the south, spilled from the sides of the shattered van.

Another strike on a Lebanese army position south of Tyre killed one soldier, wounded another and left six men missing. And on a main road in Tyre, a man selling tiny cups of coffee to passersby on a main street was killed.

Israel has seized a number of Hezbollah prisoners in the course of the fighting, and on Sunday, the military announced that one guerrilla it is holding was involved in the raid that resulted in the capture of two Israeli soldiers. It did not say when the man was captured.

The proposed Security Council resolution called for the immediate and unconditional release of the two Israeli soldiers, language that pleased Israeli officials, but stopped short of demanding the release of Lebanese prisoners being held in Israel, which drew criticism from Lebanese officials.

Rice, who traveled to President Bush's Texas ranch on Sunday to brief him, said no one should expect the proposed resolution to offer a quick fix.

“There were things Israel wanted and things Lebanon wanted. Everybody wasn't going to get what they wanted,” she said.

“We are urging all states in the Security Council to back this resolution as a first step,” Rice said. “We heard very favorable remarks about it” on Saturday, she said, and added that she would go to New York to further diplomatic talks if necessary.

Rice and national security adviser Stephen Hadley, who accompanied her to Crawford, Texas, indicated that U.S. officials see efforts to end the violence in Lebanon as an opportunity to promote a broader restructuring of the Middle East. The Bush administration rebuffed appeals for an immediate cease-fire in the early days of the conflict, insisting that the larger issue of Hezbollah's presence in southern Lebanon had to be addressed.