Updated: Reported Kidnappings of Two More Israeli Soldiers

MSNBC reports that Hezbollah is claiming that it has captured two Israeli soldiers 'across the border in southern Lebanon on Wednesday.' An Israeli army spokesperson was not yet able to confirm the report.

Hezbollah announced the claim on Al-Manar, its television station in Lebanon, after Israeli aircraft struck guerrilla positions in southern Lebanon in response to rocket attacks on northern Israeli communities.

more as the facts come in...

Update: Israel considers this incident to be an 'act of war' and the situation is escalating quickly:

Hezbollah guerrillas have captured two Israeli soldiers and killed up to seven Israelis, in what Israel described as an act of war by Lebanon that would draw a "very painful" response.

Israel mobilised a reserve infantry division and Hezbollah declared an all-out military alert.

Two Lebanese civilians were killed in an Israeli air strike on a coastal bridge at Qasmiyeh.

Four other bridges in the south were hit and five Lebanese were wounded, security sources said.
[...]
"It is an act of war by the state of Lebanon against the state of Israel in its sovereign territory," Israeli Prime Minister Ehud Olmert said of Hezbollah's action, threatening a "very painful and far-reaching" response.

According to CNN, Israeli tanks and troops have been moved into Lebanon and the Israeli Prime Minister is meeting with his cabinet to discuss further action. The leader of Hezbollah has said it wants the release of prisoners in Israel in exchange for the soldiers and stated that if the Israelis believe a miltary incursion will end this standoff, they are being 'delusional, delusional, delusional'.

Update: BBC News is reporting (no story up yet) that Israel has launched air raids against Lebanon, according to Lebanese government sources.

The White House has dragged Syria and Iran into the fold now:

"The United States condemns in the strongest terms this unprovoked act of terrorism, which was timed to exacerbate already high tensions in the region and sow further violence. We also hold Syria and Iran, which have provided long-standing support for Hezbollah, responsible for today's violence. We call for the immediate and unconditional release of the Israeli soldiers," reads a statement released by the White House press secretary.

"Hezbollah's actions are not in the interest of the Lebanese people, whose welfare should not be held hostage to the interests of the Syrian and Iranian regimes. We reiterate the international community's insistence that all parties in the region fulfill their obligations under U.N. Security Council resolutions 1559 and 1680, and cease all support for Hezbollah," the statement continues.

This is turning into one seriously gigantic mess. I'll add more updates as they happen.