Israeli stocks took another beating Thursday as the IDF began to escalate Operation Just Rewards after Wednesday's Hizbullah attack in which eight soldiers were killed and two were kidnapped. The benchmark TA-25 index ended the day down 33.22 points, or 4.25 percent, at 748.84, on volume of $714 million, more than three times the daily average. The TA-100 index was off 32.85 points, or 4.1%, at 763.31. "Although price levels are attractive, we would not recommend entering the market at this time, until it becomes clear whether this will be a relatively short or extended escalation," Excellence Nessuah told clients Thursday morning. "We believe the most likely scenario will be a relatively short but massive Israeli retaliation in Lebanon, with the objective of establishing deterrence. This would be viewed positively by the market, as investors will anticipate a quick end to the situation. Alternatively, if it becomes apparent that the situation will drag on for months, we will see further pressure on equities." Thursday saw dozens of Katyusha attacks that killed one and wounded dozens in northern Israel. In response, the IDF laid siege to Lebanese ports and airspace. Attacks included regular bombardment of Hizbullah positions in southern Lebanon and the bombing and closure of the Beirut International Airport. The shekel, meanwhile, was hit with biggest two-day decline in eight years. The currency fell to 4.51 against the US dollar from 4.4452 late Wednesday. Over the past two days, the shekel has declined just under 3%. Insurance stocks were among the biggest equity losers after Migdal warned that it might report a second-quarter loss due to stock market losses during the period. Migdal shares dropped 8.9% to NIS 4.92, Harel fell 8.4% to NIS 163.2 and Clal gave up 8.5% to NIS 76.16. Bank shares also suffered more declines. IDB Holding shed 6.8% to NIS 89.31; Hapoalim slumped 4.9% to NIS 18.57; Leumi slid 6.2% to NIS 15.07; and Mizrahi-Tefahot was down 4.1% to NIS 24.52.