Israeli Prime Minister Benjamin Netanyahu said on Wednesday that Israel's forces were expanding a "buffer zone" in southern Lebanon as the military pressed ahead with its war against Hezbollah.

"We have created a genuine security zone preventing any infiltration toward the Galilee and the northern border," Netanyahu said in a video statement.

Lebanon's government has been wedged into a war not of its choosing between Hezbollah and Israel, as the Iran-backed militants harden their stance and Israel demands the group's elimination.

Beirut has been struggling to pull the country back from the brink after Hezbollah drew Lebanon into the Middle East war on March 2, firing rockets into Israel to avenge the killing of Iran's supreme leader.

Iranian state television, citing an unidentified senior official, said Wednesday that Iran had rejected a peace plan proposed by the United States to end the Middle East war.

Khalil and his young family are sheltering in a theater in south Lebanon's Tyre, refusing to leave despite Israeli bombardment on the city that is now almost cut off from the rest of the country.

U.N. Secretary-General Antonio Guterres said Wednesday that fighting between Israel and Hezbollah must not condemn Lebanon to the same fate as Gaza, the Palestinian territory decimated by years of conflict.

Hezbollah chief Sheikh Naim Qassem said Wednesday that negotiating with Israel under fire would amount to "surrender" for Lebanon, and urged the government to reverse its ban on the party's military activities.

"When negotiations with the Israeli enemy are proposed under fire, this is an imposition of surrender," Qassem said, rejecting the Lebanese president's initiative to start direct negotiations "with an enemy that occupies our land and carries out daily attacks".

Iran and Israel traded fresh missile and drone strikes Wednesday, with countries across the Middle East coming under fire as diplomats worked in the background to end the nearly four-week war.

Here are the latest developments in the Middle East war:

Iran fired cruise missiles at the USS Abraham Lincoln aircraft carrier, the military said in a statement carried by state television, warning of further launches when the strike group's ships come in range.

Israel launched strikes on south Lebanon and Beirut's southern suburbs on Wednesday, as Hezbollah said it kept up attacks on Israeli troops.