Everyone leads with the fighting in Lebanon and Israel, which continues to get worse. Eight Israelis were killed after Hezbollah rockets hit Haifa on Sunday, and early-morning reports say Hezbollah has struck the Galilee region of Israel for the first time, hitting several towns but causing no casualties. Sheik Hassan Nasrallah, Hezbollah's leader, promised "new surprises."

Israel, in turn, continued its air assault on Lebanon, killing 45, including nine Lebanese soldiers at army bases in the north (remember that it's Hezbollah, not the Lebanese armed forces, attacking Israel) and eight Canadian citizens.

Israeli officials said that the missile that hit Haifa was a Fajr-3, which is Iranian-designed but may have been built in Syria. "The impact of the deaths and the use of the new missile were a qualitative and psychological escalation of the conflict," the New York Times says.

It also prompted the papers to look at Hezbollah's arsenal, details of which are not well-known. But the group is thought to have more than 10,000 of the short-range, inaccurate Katyusha rockets that have been most commonly used during the last five days. (The NYT quotes an Israeli official as saying that  fewer than 900 have been used so far.) The range of the missiles goes up to (possibly) 60 or 80 miles with the Iranian-made Zelzal, which if Hezbollah possesses could reach the edges of the Tel Aviv area. Hezbollah, for its part, says it used Raad missiles to attack Haifa.

According to Israeli military sources quoted in Ha'aretz, use of the longer-range missiles would require approval from Tehran.

The Los Angeles Times and NYT both run good analyses of why the Arab world is dithering over how to respond to the conflict, when conventional wisdom would suggest they would be cheering on anyone attacking Israel. The big reason that's not happening, both stories agree, is that the conflict showcases the ascendance of Iran, a traditional rival to Arab states. As the NYT puts it, "Israel is the devil they know, but Iran is the growing threat."

Another factor is that the success and gumption of ragtag Hezbollah makes the big Arab states' failure to do anything against Israel stand out, said an analyst quoted in the LAT. Another observer notes that Lebanon is home to "the most pro-American Arabs in the Middle East," and the failure of the U.S. to stand up to Israel will be disappointing to them.

The Washington Post fronts a melancholy portrait of Beirut at war again, where many non-Shiites resent Hezbollah's growing dominance of their country.

The Wall Street Journal observes on its front page that because Hezbollah has no bases or armories and instead keeps its rocket-launchers in supporters' homes, it will be nearly impossible for Israel to take them out without a brutal ground invasion.

World leaders at the G8 summit in Russia put out an anodyne statement on the conflict, blaming Hezbollah and Hamas for escalating the violence but asking Israel to practice restraint. France wanted the statement to call for a cease-fire, but the U.S. blocked it. The leaders also agreed to look at the possibility of an international force to deploy to the Israel-Lebanon border, but no specifics were offered. The European Union is looking at such a force, but Israel's prime minister says he's against it, according to early-morning reports. The NYT's G8 story leads with an even more anodyne agreement on energy security.