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July 20, 2006
Editor's note: Reported, written, and on the wire in 20 minutes.

By Amanda Beck

WASHINGTON, July 20 (Reuters) - Israeli strikes in Lebanon have had a limited effect on the oil and global financial markets, IMF director of communications Masood Ahmed said on Thursday.

"What we can say is that the impact so far on both the oil markets and on financial markets globally has been limited," Ahmed told reporters.

The cost of Lebanese economic reconstruction would be substantial but had not yet been estimated, Ahmed added.

Israelis launched an air offensive in southern Lebanon on July 12 in an effort to retrieve two soldiers kidnapped by Hizbollah guerrillas. They have since bombed roads, bridges, ports, airports, and factories.

The bombardment coincides with a Gaza Strip offensive designed to retrieve another captured soldier and halt Palestinian rocket fire.

The conflict has killed more than 300 people and helped push U.S. crude oil futures to $78.40 a barrel last week.

There was no sign on Thursday that Israel or its Lebanese Shi'ite foes were ready to stop fighting but also no indication that the violence would engulf oil-producing neighbors or affect exports from Syria or Iran.

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