At least one Jewish settler was killed when Hezbollah guerillas fired anti-tank shells over the northern Israeli town of Shlomi on Sunday, the Israeli army and emergency services said.
Four people were hurt, one seriously, the report said.
The Lebanese Shiite armed group, which is backed by Iran and Syria, routinely responds to Israeli air force flights over Lebanon with anti-aircraft fire, but tensions have worsened in recent days.
A senior security official, speaking on condition of anonymity, said three 57 mm anti-tank shells were fired at the area.
On Friday Israel and Hezbollah exchanged artillery fire over a disputed area near the confluence of the Syrian, Lebanese and Israeli borders - the first such exchange in eight months.
Israeli Foreign Minister Silvan Shalom demanded Sunday that Syria and Lebanon restrain Hezbollah group.
Anti-aircraft shells also fell Saturday on the northern town of Kiryat Shemona, but no injuries were reported.
**PHOTO CAPTION***
Smoke rises from the Rashaya area in south Lebanon August 8, 2003, during an air raid by Israeli warplanes. Photo by Karamallah Daher/Reuters