[Video transcript]

Where people gathered for more than a century to shop ... transformed into a mass of rubble and flames.

The Lebanese Red Cross said the fires were so intense that rescuers struggled to gain access as they searched for casualties.

With daylight, the sheer scale of the damage was made clear.

This coffee shop owner came to see what was left of his business — but found only ruins.

Ahmad Fakih, coffee shop owner: "This is one of the oldest souks in Nabatiyeh. In the entire city and the surrounding area, all the people depend on this souk here."

The Israeli military had earlier urged residents to leave the city.

But even with paramedics searching the ruins for survivors — many were determined not to go.

Ali Taha, Nabatiyeh resident: "When they targeted Nabatiyeh marketplace it was as if they have targeted my house. We were raised there, we know everyone and loved all the people there. This is our hometown and we will not leave."

The attack on the city, just 12 kilometers from the Israeli border, comes as the Israeli military intensifies and expands its operations in Lebanon.

Israeli soldiers fighting in this village just a few kilometers inside the country told journalists that they were engaged in close combat with Hezbollah militants.

Yaniv Malka, Israel Defense Forces: "There was hidden terrorists here in this village. Face-to-face battles. It means that my troops are seeing, in their eyes, terrorists, and fight them in the streets."

The Israeli military has ordered dozens more villages to evacuate due to the fighting.

But it's not just Lebanese civilians that have been put in harms way.

The UN says Israeli troops have fired upon peacekeepers stationed on the border several times in the last week, causing multiple injuries.

On Sunday, Israeli Prime Minister Benjamin Netanyahu urged the UN again to pull them out.

Benjamin Netanyahu, Israeli Prime Minister: "Your refusal to evacuate the UNIFIL soldiers makes them hostages of Hezbollah. Mr. Secretary General, get the UNIFIL forces out of harm's way. It should be done right now, immediately."

Netanyahu's appeal comes after dozens of countries re-affirmed their support for the UN mission despite the rising violence.