JERUSALEM -- Israeli military officials now say a vessel in the Mediterranean that was hit by a Hezbollah rocket barrage was a merchant ship.

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They first said only that it was a civilian ship. The ship is said to have been hit by a rocket barrage intended for Israeli warships.

The officials did not know the nationality of the ship or whether there were casualties.

Meanwhile, Hezbollah leader Hassan Nasrallah said Friday that he welcomes "open war" with Israel, as a second day drew to a close with escalating violence.

His statement came after Israeli missiles destroyed Hezbollah's headquarters in south Beirut.

"You wanted an open war, and we are ready for an open war," Nasrallah said in a taped statement. He vowed to strike even deeper into Israel with rockets.

One of Israel's warships was hit by an unmanned aircraft rigged with explosives launched by militants in Lebanon late Friday, an Israeli military official said.

Israel said little about the condition of the ship or about a report that four of its sailors are missing.

The drone was apparently developed by Hezbollah, putting yet another weapon at its disposal.

At least twice in recent years, the militants have flown unmanned drones over northern Israel, an area they spent much of the day blasting with rocket fire. One of those rockets hit a house, killing a woman and her grandson.

Meanwhile, almost a quarter-million Israelis are hiding in bomb shelters after more Hezbollah rockets slammed into northern Israel early Friday.

Those attacks came as Israel continued pounding Lebanon, after guerrillas crossed the border to capture two soldiers.

The toll in three days of clashes rose to 73 killed in Lebanon and at least 12 Israelis, as international alarm grew over the fighting and oil prices rose to above $78 a barrel.

Israel is continuing efforts to isolate the Lebanese from the outside world. Its military jets have again struck the Beirut airport over and over, along with main highways and bridges. Warships continue to blockade the port.

Witnesses said Israeli aircraft struck targets in south Beirut where Hezbollah, the militant Shiite faction, is headquartered.

CNN reported Friday that the remains of at least one long-range rocket that landed in Haifa led Israelis to believe it was made in Iran.

U.S. Vetoes Gaza Pullout

Standing alone among the 15 members of the U.N. Security Council, the United States voted against a resolution demanding Israel immediately leave Gaza.

It's the first time in almost two years that the United States has used its veto power. Ten other countries voted for the Arab-backed resolution, while four abstained.

Qatar sponsored the measure, which accuses Israel of a "disproportionate use of force" endangering Palestinian civilians.

Israeli forces went into Gaza late last month after Hamas militants crossed the border and abducted a soldier.

After complaints of bias, wording was added to the resolution calling for the soldier's release and urging Palestinians to stop firing rockets at Israel.

Regional Leaders Seek Solutions

The Arab League called an emergency meeting of foreign ministers in Cairo on Saturday. Egypt launched a diplomatic bid to resolve the crisis, amid apparent frustration among moderate Arab nations that Hezbollah -- and by implication its top ally Syria -- had started the fight with Israel.

Saudi Arabia accused Hezbollah guerrillas of "uncalculated adventures" that precipitated the latest Middle East crisis.

Palestinian President Mahmoud Abbas said he is asking the United States to pressure Israel to help halt the offensive.

Explosion Opens Gaza Border Wall

A suspected bomb has breached the border wall separating Gaza from Egypt, allowing hundreds to pour through.

The border has largely been closed since June 25, when Palestinian militants carried out a cross-border raid on a military outpost, killing two Israeli soldiers and capturing one.

Hundreds of people have been stranded on the Egyptian side of the border, unable to get to their homes in Gaza.