Crude oil above $77 on Middle East conflict
U.S. crude futures rose further above $77 on Monday after a weekend of worsening conflict between Israel and Hizbollah guerrillas, leaving traders nervous the violence could spread to more Middle East countries.
NYMEX crude for August delivery was trading up $0.35 or 0.45 percent at $77.38 a barrel in ACCESS electronic trading by 2210 GMT, a dollar shy of last week's record $78.40.
NYMEX August gasoline lagged the complex's gain, rising $0.0051 or 0.22 percent to $2.3300.
Hizbollah killed eight people in the Israeli city of Haifa on Sunday in its deadliest rocket attack on the Jewish state, while Israeli planes killed 41 people in Lebanon in a fifth day of strikes.
Leaders of the world's major powers meeting in Russia urged restraint but said Israel had a right to self-defence, putting the onus on Hizbollah to stop the violence by first releasing two Israeli soldiers it captured on Wednesday.
Hezbollah rockets leave Haifa on edge
JOSEF FEDERMAN
Associated Press
HAIFA, Israel - It was just an hour into the new work week. Maintenance workers at the train depot were back on the job when air raid sirens began to wail.
Seconds later, a long-range missile crashed through the roof, killing eight and raising the stakes in nearly a week of fighting. Israel's third-largest city was well within range of Hezbollah's rockets.
The attack Sunday left behind pools of blood and piles of shattered glass on a train platform and brought life in this normally bustling city to a standstill.
Before the day was over, 30 missiles had hit the Haifa area, spurring residents to seek cover ins concrete bunkers and leaving a city known for its spirit of tolerance between Israeli and Arab residents on edge.
"The city of Haifa absorbed a tough hit. There is no doubt," Defense Minister Amir Peretz said during a visit. "The city of Haifa is now licking its wounds, eight dead - workers who came to do their work, innocent people."
Haifa was hit by relatively primitive Katyusha rockets last week. But on Sunday, Israeli officials said Hezbollah also launched at least four Iranian-made Fajr missiles, its first use of the weapons. The missiles have a far larger warhead than Katyushas. The Fajr-3 has a range of 22 miles and a 200-pound payload.
Late Sunday night, rockets fired from Lebanon hit the Israeli towns of Afula and Upper Nazareth. The two towns are about 25 miles south of the Lebanese border, roughly the same distance as Haifa.
Upper Nazareth is a Jewish town next to historical Nazareth, the boyhood home of Jesus. The population of Nazareth is made up of Muslim and Christian Arabs who are Israeli citizens.
The military said the towns of Migdal Haemek, Givat Ella and Nahalal were also hit in the late night barrage. There were no immediate reports of casualties.
The fighting broke out last week after Hezbollah crossed Israel's northern border and captured two Israeli soldiers. The group has demanded the release of thousands of Palestinian prisoners in exchange for the soldiers.
Yona Isakov, a maintenance worker at the depot, was in a warehouse 150 yards from the depot at the time of the attack. He said air raid sirens began wailing just 20 seconds before the deadly missile struck, and there was no time to get to a bomb shelter.
Other workers said they never even heard the air-raid sirens over the usual noise at the facility.
"It was awful. It was terrifying. There were explosions in all directions," Isakov said.
At the adjacent depot, the attack was instantaneous and devastating.
The Syrian missile tore through the metal roof of the building and struck a crowd of about 30 maintenance workers. Eight people were killed, six were seriously wounded, and the rest suffered lighter wounds, said police spokesman Micky Rosenfeld.
Huge lamps attached to the ceiling came crashing down. Piles of shattered glass and pools of blood littered the work platform, and windows on two trains, on opposite tracks some yards away from each other, were blown out.
Orthodox rescue crews worked their way through the debris gathering pieces of flesh for proper burial under Jewish law.
In a scene repeated across the city, depot workers spent several hours huddled in a drab concrete bomb shelter while missiles struck through the morning.
As workers began to leave the shelter, more sirens wailed, sending people rushing for cover again. Muscular workmen sat anxiously, calling loved ones and chatting quietly. A group of men huddled around a radio, one of them shaking and covering his eyes.
Haifa, home to 270,000 people, is the largest city that Hezbollah has hit with the more than 600 missiles it has fired at Israel since Wednesday. It is home to one of Israel's most important ports, its oil refineries and some of its most sensitive industrial facilities.
Haifa had not been hit by a rocket since the first Gulf War in 1991, when Iraq launched Scud missiles at Israel.
Sunday's attack signaled that increasingly large swaths of Israeli territory were vulnerable to attacks from Hezbollah. The group said the strike was meant as a "warning," and that it would hit bigger targets in Haifa, including oil refineries and major chemical plants.
After the deadly missile strike in Haifa, the normally bustling city was transformed into a virtual ghost town.
Stores were ordered closed, and an estimated 500,000 people throughout northern Israel were told to remain indoors. People in cities as far away as Tel Aviv, 60 miles south of Haifa, were ordered to remain close to sheltered areas.
During the middle of a normal work day, the streets of Haifa were quiet, and small groups of people at bus stops frantically tried to hail cabs to rush home.
In the city's industrial port area, the loudest noise was birds chirping. Even lions at the zoo were taken indoors out of fear that a rocket would blast a wall and release them into the city. Minimarkets were about the only businesses operating, as residents stocked up on milk, bread and other staples.
Some in this city, which has a large Arab population, felt Haifa was an odd target.
"They have to put Hezbollah in its place," said Osama Hajir, 51, a resident of an Arab neighborhood. "Here the missiles are falling on Jews and Arabs alike."
But beneath the shows of unity, tensions between Jews and Arabs were palpable.
"My country is at war with my people, and I don't want to choose between the two of them," said Sayid Halloun, 55, an Arab-Christian supermarket owner. "I don't want to become the enemy of my country, or the enemy of my people."
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