An Israeli air raid has killed at least 13 Lebanese civilians who were fleeing southern border areas.
Women and children were among those killed when the convoy was hit.
Israeli has expanded its campaign launched after Hezbollah militants seized two Israeli soldiers. More than 70 Lebanese have been killed.
Hezbollah has responded with rocket attacks. On Saturday, several rockets hit the town of Tiberias in the deepest such attack inside Israeli territory.
Three Israeli sailors are missing after their ship was hit by a Hezbollah missile on Friday. The body of a fourth was found, according to Israeli media.
The ship caught fire after it was hit by an Iranian-made missile, the Israeli military said.
Israeli jets have also fired rockets on the Lebanon-Syrian border.
"The air force is bombing roads and bridges on the border between Lebanon and Syria to prevent Hezbollah from taking our captured soldiers out of the country," an Israeli army spokeswoman said, quoted by the Agence France Presse news agency.
Israeli Prime Minister Ehud Olmert has said the offensive will continue until Hezbollah releases the soldiers and stops firing rockets at Israel.
'Bodies litter road'
A number of families were fleeing their village of Marwahin on the Israeli border when their convoy was struck by missiles, a UN spokesman told the BBC.
A local resident told al-Jazeera TV the villagers were targeted after being ordered to leave Marwahin, and refused shelter by the UN forces.
"Their bodies litter the road", Akram Ghannam said.
UN spokesman Milos Struger said several vehicles were still on fire.
Correspondents say there is nowhere safe to go for many trying to flee the south.
In past hostilities much of the mainly Shia population of the south has sought refuge in the capital Beirut's largely Shia southern suburbs, but this time they are under attack too, the BBC's Jim Muir reports from Damour, south of Beirut.
On Saturday, Israeli warplanes also hit the southern suburbs, which are a Hezbollah stronghold.
Earlier, Hezbollah's al-Manar TV says three civilians were killed in an Israeli attack in Hermel, on the border with Syria.
They also carried out raids in the north and the north-east of the country for the first time on Saturday.
A number of bridges, petrol stations and key roads have also been hit, including the main road linking northern Lebanon to Syria.
Thousands of foreigners have fled Beirut, leaving its economy in tatters.
France has said it is ready to evacuate its thousands of nationals from Lebanon.
The presidents of the US and Russia have differed in emphasis in voicing concern about the Mid-East crisis at the G8 summit in St Petersburg.
George W Bush urged Lebanon's Hezbollah to disarm while Vladimir Putin called for a "balanced" use of force by Israel.
When will Israel STOP? They will end up killing thousands..
Women and children were among those killed when the convoy was hit.
Israeli has expanded its campaign launched after Hezbollah militants seized two Israeli soldiers. More than 70 Lebanese have been killed.
Hezbollah has responded with rocket attacks. On Saturday, several rockets hit the town of Tiberias in the deepest such attack inside Israeli territory.
Three Israeli sailors are missing after their ship was hit by a Hezbollah missile on Friday. The body of a fourth was found, according to Israeli media.
The ship caught fire after it was hit by an Iranian-made missile, the Israeli military said.
Israeli jets have also fired rockets on the Lebanon-Syrian border.
"The air force is bombing roads and bridges on the border between Lebanon and Syria to prevent Hezbollah from taking our captured soldiers out of the country," an Israeli army spokeswoman said, quoted by the Agence France Presse news agency.
Israeli Prime Minister Ehud Olmert has said the offensive will continue until Hezbollah releases the soldiers and stops firing rockets at Israel.
'Bodies litter road'
A number of families were fleeing their village of Marwahin on the Israeli border when their convoy was struck by missiles, a UN spokesman told the BBC.
A local resident told al-Jazeera TV the villagers were targeted after being ordered to leave Marwahin, and refused shelter by the UN forces.
"Their bodies litter the road", Akram Ghannam said.
UN spokesman Milos Struger said several vehicles were still on fire.
Correspondents say there is nowhere safe to go for many trying to flee the south.
In past hostilities much of the mainly Shia population of the south has sought refuge in the capital Beirut's largely Shia southern suburbs, but this time they are under attack too, the BBC's Jim Muir reports from Damour, south of Beirut.
On Saturday, Israeli warplanes also hit the southern suburbs, which are a Hezbollah stronghold.
Earlier, Hezbollah's al-Manar TV says three civilians were killed in an Israeli attack in Hermel, on the border with Syria.
They also carried out raids in the north and the north-east of the country for the first time on Saturday.
A number of bridges, petrol stations and key roads have also been hit, including the main road linking northern Lebanon to Syria.
Thousands of foreigners have fled Beirut, leaving its economy in tatters.
France has said it is ready to evacuate its thousands of nationals from Lebanon.
The presidents of the US and Russia have differed in emphasis in voicing concern about the Mid-East crisis at the G8 summit in St Petersburg.
George W Bush urged Lebanon's Hezbollah to disarm while Vladimir Putin called for a "balanced" use of force by Israel.
When will Israel STOP? They will end up killing thousands..