Lebanon was drawn into the Middle East war on Monday, when Hezbollah attacked Israel in response to the killing of Iranian supreme leader Ayatollah Ali Khamenei during US-Israeli strikes over the weekend.

The group stepped up its attacks on Wednesday, saying it targeted Israeli positions as far as Tel Aviv in at least 15 attacks.

"We are facing aggression... our choice is to confront it until the ultimate sacrifice, and we will not surrender," Hezbollah leader Naim Qassem declared in his first speech since the latest round of fighting broke out.

"For us this is an existential defence," he added.

Lebanese authorities announced at least 72 people killed, 437 wounded and 83,000 displaced from their homes since Monday.

The Israeli military told people living south of Lebanon's Litani river -- a large area stretching around 30 kilometres (20 miles) north of the border -- to evacuate, warning that the army was "compelled to take military action" against Hezbollah in the area.

On Tuesday, Israel's military said it was creating a buffer zone inside Lebanon to protect Israeli residents.

Troops from three divisions, including infantry, armoured and engineering units were operating in southern Lebanon, Israel's army said late Wednesday.

AFP video footage shot on Wednesday showed what appeared to be two Israeli tanks amid residential buildings in Khiam, about six kilometres north of the border.

"Peacekeepers observed today several IDF (military) movements and military activities, including near... Khiam, Beit Lif, Yaroun, Houla, Kfar Kila, Kherbeh and Kfar Shouba," the UN peacekeeping mission, UNIFIL, said in a statement.

It added that the Israeli movements violate Lebanon's "sovereignty and territorial integrity".

Israel said Wednesday that two of its soldiers had been "moderately injured" by anti-tank fire in the south.

Hezbollah said its fighters had engaged Israeli troops in "direct" clashes in Khiam, "inflicting confirmed casualties".

- Hotel strike -

Meanwhile, Israel expanded its aerial campaign, striking a hotel in Hazmieh, the first reported Israeli attack on the predominantly Christian area in Beirut's suburbs, which is near the presidential palace and several foreign embassies.

Some rooms were gutted in the strike, and wounded people received treatment in the lobby, AFP images showed.

People fled through debris carrying suitcases past the Comfort Hotel's sign, which had fallen broken to the ground. It was not possible to determine who was targeted in the attack.

The upscale district overlooks the capital's southern suburbs, where Hezbollah holds sway, and which Hazmieh resident Lena had initially thought was the target of the strikes.

"I was wrong," the 59-year-old woman told AFP. "Just a stone's throw from my home, a hotel was targeted."

Several people told AFP they had received recorded phone messages telling them to evacuate.

- Southern suburbs targeted -

A series of strikes on Wednesday continued to target Beirut's southern suburbs following an evacuation warning from Israel's military.

One of the strikes targeted a building near a major hospital, according to an AFP photographer.

AFP footage showed thick plumes of smoke rising above buildings in the densely populated suburb, which some residents fled when the violence erupted on Monday.

In Aramoun and Saadiyat south of Beirut -- two towns outside of Hezbollah's traditional sphere of influence -- the health ministry said Israeli strikes killed six people and wounded eight others. It cautioned that this was a "preliminary toll".

AFP footage from Aramoun showed damaged cars and rescue workers carrying a wounded person on a stretcher.

Strikes also targeted a four-storey building in the city of Baalbek, in Lebanon's east, far from the border where Hezbollah also has a strong presence.

AFP correspondents saw rescue workers searching through the rubble for survivors.

Israel continued to strike a number of other areas including Tyre, Nabatieh, and other locations in the Baalbek district on Wednesday.