Israel has been hit by a rocket attack from Lebanon, officials say.

Two Katyusha rockets exploded near the northern Israeli border town of Kiryat Shmona. There were no casualties, but roads and vehicles were damaged.

Israeli and Lebanese security sources said they believed a Palestinian group had fired the rockets. Israel said it would not "succumb to provocation".

The Lebanese group Hezbollah has denied any involvement in the attack. No-one has yet claimed responsibility for it.

It is the first time Israel has come under such an attack from Lebanon since last year's conflict with Hezbollah.

'Not drawn in'

The rockets came from the Lebanese village of Taibeh, 4km (2.5 miles) from the border with Israel, Lebanese television station LBC reported. One hit a factory, the other hit a car.

A Hezbollah spokesman in Beirut told Reuters news agency his group was not involved in the attack, saying: "We had nothing to do with this."

Israeli Prime Minister Ehud Olmert said the attack was probably carried out by "a small Palestinian movement".

"We are still clarifying the circumstances," he said, during a visit to New York.

"Lebanon has been very quiet in the last nine months and hopefully will continue to be so."

An official traveling with Mr Olmert said he believed the attack was intended as a provocation but Israel would "not be drawn in".

Mr Olmert earlier met the UN Secretary General Ban Ki-moon and told him Israel was prepared to engage with a new Palestinian cabinet.

Palestinian Authority President Mahmoud Abbas on Sunday swore in a new government that excludes the Islamist Hamas movement.

Mr Abbas sacked the previous Hamas-dominated government as its gunmen overran the Gaza Strip and expelled their rivals from Mr Abbas' Fatah party.

On Monday Mr Olmert will travel to Washington where he is expected to meet US President George W Bush and Secretary of State Condoleezza Rice.

PHOTO CAPTION

Israeli soldiers look at the wrecked car in Kiryat Shmona