NABATIYEH FAWQAH, Lebanon (AP) _ Israeli shellfire killed at least 40 Lebanese refugees who had sought shelter with U.N. peacekeepers in southern Lebanon, U.N. officers said today.

Timor Goksel, a U.N. spokesman in southern Lebanon, said he could not confirm the death toll, but confirmed there had been such an attack.

An undetermined number of refugees also were wounded when at least five 155mm howitzer shells struck the headquarters of the Fijiian battalion attached to the U.N. peacekeeping force in southern Lebanon, the unidentified officers said.

The headquarters is in the village of Qana in hills southeast of the port city of Tyre. It was not immediately known whether any of the 70 Fijian peacekeepers were killed or wounded.

An Israeli military offensive against Hezbollah guerrillas in Lebanon has driven some 400,000 terrified Lebanese from their homes. Some have sought safety with U.N. peacekeepers.

``It's a massacre,'' Goksel, spokesman for the 4,500-member U.N. peacekeeping force in Lebanon, told The Associated Press.

He said he had lost contact with the base and did not have a casualty figure.

But he said: ``The numbers are frightening.''

He said 500 civilians had been staying at the base, and there were reports that about 40 had been killed.

``They got a hit. People burning in the building, I'm afraid. It took a long time to convince the Israelis to stop firing,'' he said.

He said U.N. forces were trying to send ambulances and other rescue equipment to the scene.

Earlier today, Israeli warplanes fired missiles at an apartment building in southern Lebanon, killing 11 people including a mother, her 4-day-old daughter and six other children, the Lebanese army said.

At least 10 others were injured in the attack on a village near the market town of Nabatiyeh. It was the deadliest attack yet in Israel's 8-day-old offensive against Hezbollah guerrillas who have been attacking northern Israel.

Villagers in Nabatiyeh Fawqah said Israeli four jet fighters swooped down and unleashed four missiles. A three-story apartment building took a direct hit and collapsed. Another building 200 yards away was badly damaged.

A mother, her 4-day-old daughter and six other children aged up to 18, were among the dead, rescuers and neighbors said. The father had left for an Islamic pilgrimage to Mecca, Saudi Arabia.

Rescuers and Lebanese army soldiers used their hands, shovels and bulldozers to clear the rubble from the demolished building in their search for bodies or survivors.

They spotted the blackened arm of a decapitated woman under the debris and dug feverishly to retrieve the body. Artillery shells fell nearby, interrupting the rescue operation and sending people diving for cover.

Lebanese security sources said the building had been used by families who defied Israeli orders to evacuate southern Lebanon or risk being caught in an attack.

An Israeli army officer, however, said that according to a preliminary report, the planes attacked after coming under fire from anti-aircraft missiles in the building. The military was checking to see if that was the case, the officer said.

Israeli gunboats joined in the battle for the first time today, firing shells that hit Syrian army and intelligence checkpoints on the coastal highway near the southern provincial capital of Sidon.

The Syrians abandoned their roadside posts and took cover in beach dugouts, watching the gunboats with binoculars.

Washington has been trying to mediate a cease-fire, and today, a U.S. official offered a truce formula.

U.S. State Department spokesman Nicholas Burns said that if Hezbollah made the first move by halting its rocket attacks on northern Israel, the Clinton administration believed Israel would stop its retaliatory attacks.

``Our objective is to, as quickly as possible, end the fighting,'' Burns told reporters in Japan, where he is on a trip with President Clinton.

Hezbollah guerrillas have been fighting for more than a decade to drive Israeli troops from the border zone they hold in southern Lebanon to curb attacks on northern Israel.

Before the attack on the U.N. base, 59 kpeople had been reported killed and 196 wounded since the Israeli offensive began, according to Lebanese police, who say most of the dead are Lebanese civilians. Israel gives similar casualty counts, but says about 30 of the dead are guerrillas. Ten of the wounded are Israeli civilians, Israel says.

The fighting has driven some 400,000 southern Lebanese from their towns and villages and caused at least 17,000 people to flee northern Israel.

Israel launched the military operation in an effort to stop Hezbollah rocket attacks on northern Israel, but the guerrilla attacks have intensified since: More than 200 rockets have crashed down on northern Israel in the past week, the Israelis say.

Hezbollah fired more rocket volleys into northern Israel overnight and this morning, and Israel radio reported that a motorist in the Israeli border town of Kiryat Shemona was hurt.