JERUSALEM - Israel destroyed most of the military positions of Lebanese Hezbollah guerrillas along its northern border, in the heaviest fighting since it ended its 18-year occupation of southern Lebanon, an Israeli commander said Monday.

Sunday's rocket and artillery exchanges killed two guerrillas in Lebanon and wounded two Israeli soldiers.

An Israeli newspaper, meanwhile, reported that Iran has equipped Hezbollah with rockets capable of hitting all of Israel's major cities, including Beersheba in the south.

The Haaretz daily, citing intelligence sources, said the rockets have a range of about 200 kilometers (125 miles), or double that of weapons previously in Hezbollah's arsenal.

The Israeli commander, Brig. Gen. Gal Hirsch, declined comment on the Haaretz report.

However, he said Iranian weapons in the hands of Hezbollah, including mortars and missiles, pose a real threat to Israel. "It's a growing threat," Hirsch said.

Sunday's cross-border fighting began when Katyusha rockets were fired from Lebanon at Israel's northern Galilee region, hitting an air force base, followed by attacks on Israeli outposts along the border.

In response, Israel unleashed its fiercest artillery barrage since withdrawing from Lebanon in 2000.

"Our main effort was to destroy the frontline that Hezbollah has built in the last six years," said Hirsch, who commands an Israeli army division along the border.

Hirsch said Hezbollah had established dozens of frontline outposts along the border with Israel.

"We destroyed most of them," the commander said in a telephone interview.

Hirsch said the Israeli military was ready for a Hezbollah attack, having prepared a contingency plan. "We were waiting for them for weeks," he said.

Witnesses in the border region said several Hezbollah outposts were heavily damaged or destroyed by the Israeli shelling and air raids. Those positions are largely observation posts manned by guerrillas carrying light arms. They are different from the hidden, mobile launch sites where Hezbollah fires Katyusha rockets.

Tensions along the border rose after a senior official in the violent Palestinian group Islamic Jihad was killed in a car bomb in the southern Lebanese town of Sidon last week. Israel has denied involvement.

The Israeli commander said he's seen a strong presence of Iranian Revolutionary Guards in southern Lebanon. "Hezbollah is a wing of the Iranian effort to create a frontline against the West," he said, noting that the Iranians train and supply Hezbollah fighters.

However, reporters in southern Lebanon said they have not seen Iranian Revolutionary Guards, and that the Israelis may have mistaken local Hezbollah activists for Iranians because of similar looks, beards and training.

Hirsch said that in the event of renewed Katyusha attacks, Israel would again retaliate harshly, perhaps step up its response.

Israel has urged the Lebanese government to disarm militiias and send regular troops to the south, but the government has refused. (AP)