"I have instructed all the IDF (Israel Defence Forces) commanders to prepare for an operation aimed at taking over launching areas and reduce as much as possible Hezbollah's rocket launching capability," he told Labor lawmakers.

"If we see that the diplomatic efforts do not yield the results we expect, we will have to do it ourselves," he said, as world powers wrangled at United Nations headquarters in New York over wording of a UN resolution to end the Lebanon conflict.

Thousands of Israeli troops have been operating in southern Lebanon since Hezbollah militiamen killed eight soldiers and seized another two on Israel's volatile border with Lebanon on July 12.

Despite its presence in a zone stretching between four to ten kilometres (two to seven miles) from its border, the Israeli army has been unable to stop Hezbollah from hitting Israel with rockets.