"We are gravely concerned about the serious escalation in the attacks that we saw yesterday," UN refugee agency spokesman Matthew Saltmarsh told reporters in Geneva.

"Tens of thousands of people were forced from their homes yesterday and overnight, and the numbers continue to grow," he said.

Israeli air strikes killed at least 492 people on Monday, including 35 children, according to Lebanon's health ministry, marking the deadliest bombardment in nearly two decades.

Longtime foes Hezbollah and Israel have been locked in near-daily cross-border exchanges of fire since the start of the Israeli war on Gaza.

Monday's bombardment of Lebanon was by far the largest, not just in the past year, but since the war between Israel and the Iran-backed militant group in the summer of 2006.

"This is a region that has already been devastated by war and a country that knows suffering all too well," Saltmarsh said.

"The toll on civilians is unacceptable."

Ravina Shamdasani, spokeswoman for the UN rights office, also said the agency was "extremely alarmed by the sharp escalation of hostilities between Israel and Hezbollah.

Shamdasani called on "all parties to immediately cease the violence and to ensure the protection of civilians".

The UN children's agency meanwhile decried the impact on young people in Lebanon.

"We are warning today that any further escalation in this conflict will be absolutely catastrophic for all children in Lebanon," said Ettie Higgins, UNICEF Deputy Representative in Lebanon, speaking via video link from Beirut.

"Yesterday was Lebanon's worst day in 18 years. This violence has to stop immediately, or the consequences will be unconscionable."