Staff Sergeant Yonatan Hadassi, 21, of Kibbutz Merchavya and First-Sergeant Yotam Gilboa, 21, from Maoz Chaim were the two fallen soldiers. Nine others were wounded in the battle, two moderately.
The fighting with Hizbullah forces went on for several hours at the Israel-Lebanon border, near the Israeli town of Avivim - opposite the Lebanese village of Marun A-Ras, which was turned into a Hizbullah stronghold after Israel's hasty withdrawal from the region in 2000.
IDF Special Forces entered the area late Tuesday night and found a large stockpile of Hizbullah weapons and munitions. Hizbullah geurrillas had been hiding out and opened fire on the troops, killing the two soldiers moments before they themselves were killed. Their comrades then began shooting mortar shells at the area, making evacuation of the wounded and fallen soldiers difficult.
Small groups of IDF soldiers have been entering Lebanon for special "pin-point" operations in recent days and continued to do so throughout Wednesday.
More than 60,000 Lebanese have fled southern Lebanon and the IDF issued an order Wednesday evening calling on all 300,000 Lebanese living south of the Litani River to evacuate their homes.
The IDF has been putting special efforts into destroying long-range Zilzal missiles and launchers, capable of striking Tel Aviv with much larger missiles than have struck Israel so far. Many of the launchers are hidden in densely-populated areas.
In air strikes on targets in Lebanon, Lebanese media reported more than 50 people killed in the cities of Balbek, Sidon, Chuweifat, Hadath and Nabatiya.
Overall, the IDF says more than 1,000 terrorist targets have been hit so far, including 180 Katyusha and long-range rocket launch-sites.
The Samarian Front
In Shechem, the largest PA-controlled city in northern Samaria, more than 200 Arab terrorists were apprehended and an office of the PA was demolished. Three Arabs were killed in exchanges of fire with IDF forces surrounding the terrorist compound in the heart of the city. The compound belongs to the Palestinian Authority's Preventative Security Service.
The IDF siege on the compound began in the early morning hours and lasted until Wednesday afternoon, when its inhabitants were forced to surrender as parts of the building were systematically bulldozed. One soldier was wounded by a firebomb and treated on the scene.
Before dawn Wednesday, five wanted terrorists were apprehended in other areas of Judea and Samaria by security forces.
In a development that could place Tel Aviv within the sites of Arab missile-launchers from the south, a Katyusha rocket was fired from Gaza toward the western Negev. The rocket landed in Kibbutz Bror Hayil.
The IDF continues to carry out operations in Gaza aimed at locating kidnapped IDF soldier Gilad Shalit and preventing the launching of rockets at Israel's southern towns. Six Arabs were killed in clashes as the IDF entered the Mughazi slums coastal region. Five IDF soldiers were wounded.
Air force planes attacked three groups of terrorists in central Gaza overnight and destroyed a tunnel being constructed beneath the Karni Crossing.