As Israel vowed to retaliate for Iran's ballistic missile attack a day earlier, the region braced for further escalation.

Iran, which backs both Hezbollah and the Hamas militants who run the Gaza Strip, launched dozens of missiles into Israel on Tuesday night, another escalation in a tit-for-tat cycle pushing the Middle East closer to a regional war. Israel warned that the attack would have "repercussions".

The Israeli military said seven soldiers were killed in two Hezbollah attacks in southern Lebanon on Wednesday, without elaborating. The deaths followed an earlier announcement of the first Israeli combat death in Lebanon since the start of the incursion - a 22-year-old captain in a commando brigade. Another seven troops were wounded.

Together, the deaths announced on the eve of Rosh Hashana, the Jewish new year, were some of the biggest casualties sustained by Israeli forces in months.

In Gaza, where the nearly yearlong war that triggered the widening conflict rages with no end in sight, Israeli ground and air operations in the territory's second-largest city of Khan Younis killed at least 51 people, including women and children, Palestinian medical officials said.

Late on Wednesday night, an Israeli airstrike hit an apartment building near the Lebanese capital's city centre, the second time Israel has struck central Beirut this week. At least six people were killed and seven wounded in the residential Bashoura district.

Residents reported a sulphur-like smell following the attack, and Lebanon's state-run National News Agency accused Israel of using internationally banned phosphorous bombs.

Human rights groups have in the past accused Israel of using white phosphorus incendiary shells on towns and villages in conflict-hit southern Lebanon.

The latest actions on multiple fronts have raised fears of a wider conflict that could draw in Iran as well as the United States, which has rushed military assets to the region in support of Israel.