VIDEO - Prime Minister Ehud Olmert said Wednesday that "the events this morning are not terror attacks but actions of a sovereign state that attacked Israel for no reason. The Lebanese government, of which Hizbullah is a member, is trying to destabilize regional stability. Lebanon is responsible and it will bear responsibility."
He added: "At this moment security forces are operating in Lebanese territory and this evening the government will meet to approve the continuation of the operation in Lebanon."
"These are difficult days for the State of Israel and its citizens. There are elements in the north and south that threaten our stability and challenge our stamina and determination," the PM sated. "They will fail and pay a dear price for their actions," he said.
The prime minister made the statement during his meeting with Japanese Prime Minister Junichiro Koizumi in Jerusalem.
Olmert has ordered the government to convene on 7 p.m. Wednesday for an emergency meeting in wake of events on Israel's northern border. Foreign Miinister Tzipi Livni will convene a meeting at noon to discuss the abduction.
The meeting will concentrate on Israel's alternatives for a response in the international arena, including the possibility of turning to the United Nations for assistance and to the Security Council with a motion to condemn the recent attack.
He said Israel's response will be "restrained" but "very painful."
"Syria proved it is a terror government by nature. It is a government that supports terror and encourages murderous acts by terror groups within and outside its territory. Necessary measures will be taken against the Syrian government," Olmert said.
Defense Minister Amir Peretz said that "the State of Israel considers the Lebanese government responsible for the attack in the north. The government is also directly responsible for the fate of the abducted soldiers and must operate immediately and firmly in order to locate them, prevent any harm from being done to them, and return them to Israel."
"The Lebanese government, which allows Hizbullah to operate freely against Israel from within its sovereign territory, will bear full responsibility for the consequences. The State of Israel considers itself free to act in any way it sees fit, and the IDF has been instructed accordingly," Peretz added.
Israel Defense Forces Chief of General Staff Lit.-Gen. Dan Halutz said the kidnapping of two soldiers by Hizbullah marks a turning point in Israel's policy towards the Lebanese government.
Security officials said if the soldiers are not returned safe Lebanon will pay a heavy price as Israel will turn the country's clock back 50 years. The IDF has taken measures to call up reserve soldiers in preparation for a wide-scale operation in southern Lebanon.
"The prime minister and the defense minister understand the situation and that's what they plan to do," Halutz said.
'IDF must act in full force'
The tension of recent hours was evident at the Prime Minister's Office. The PM received constant updates from his military secretary, Major-General Gad Shamni, regarding developments on the northern border. However, due to his meeting with the Japanese prime minister, Olmert has been unable to convene his staff for consultations.
In Kadima, Olmert's party, most officials chose not to comment on the serious incidents, which pose a substantial challenge to the PM and the defense minister.
The coalition chairman, Knesset Member Avigdor Yitzhaki, said that Israel's deterrence power does not depend solely on its civil leadership: "We are all aware of the IDF's capabilities. Israel has withstood tougher situations in the past. We must activate our military power in full force in order to annihilate and uproot these phenomena – not only in Lebanon, but in pro-terror countries such as Syria as well."
"The prime minister and the defense minister understand the situation, and this is what they plan to do," he added.