Sky News are reporting that Israeli ground forces have entered Lebanon searching for the soldiers.
IDF ground troops searching for the two inside Lebanon
The Defense Ministry confirmed early Wednesday afternoon that two soldiers had been kidnapped by Hizbullah after an attack. IDF ground troops had been sent into Lebanon to search for the two. IAF jets, helicopters and UAVs were also flying above Lebanon searching for the soldiers.
Hizbullah's Al Manar TV broadcast earlier Wednesday that the organization had kidnapped the two soldiers. A senior Hizbullah official said that at least one of the allegedly kidnapped soldiers was still alive.
Hizbullah launched a heavy barrage of Katyusha rockets and mortar shells at IDF positions and communities along the northern frontier on Wednesday morning starting about 9:15 a.m.
One rocket scored a direct hit on a house in Shtula. Magen David Adom said they had treated six people so far. Both soldiers and civilians have been wounded. The wounded were being evacuated to Nahariya hospital.
Prime Minister Ehud Olmert reacted for the first time to the events in the north on Wednesday morning during a welcoming ceremony for visiting Japanese Prime Minister Junichiro Koizumi.
"There are elements in the north and in the south who are threatening our stability and are trying to test our steadfastness. They will fail, and pay a heavy price for their actions."
The IDF vowed to hold the Lebanese accountable for the attacks.
According to Channel 10, Hizbullah has offered to exchange the two soldiers and Cpl. Gilad Shalit for thousands of security prisoners.
IDF sources estimated that the attack was a Hizbullah response to Israel's early Wednesdayattempted strike on top Hamas terrorist Mohammad Deif in Gaza.
IAF helicopters, along with IDF tanks and artillery were firing at Hizbullah along the northern border and had reportedly blew up a bridge inside Lebanon.
IDF Chief of Staff Lt.-Gen. Dan Halutz has convened an emergency meeting of top brass and Olmert will convene a special meeting of the cabinet at seven Wednesday evening.
Residents of the Western Galilee had entered their shelters, and in the community of Shlomi, residents were asked to enter fortified rooms.
Olmert expressed satisfaction that Koizumi had gone ahead with his visit during these difficult days. He is the first Japanese prime minister to visit Israel in eleven years.
The northern border has been on high alert since Operation Summer rains began.
Two weeks ago, IAF planes buzzed Syrian President Bashar Assad's summer palac reportedly while he was in residence.
A month and a half ago, Israel launched a massive retaliatory strike after Hizbullah fired a series of Katyushas at Israel.