An Israeli soldier has been killed in gun clashes across the border with Lebanon, Israel's military has said.
Tensions are heightened along the northern border
Military sources said the soldier was killed in an attack on a border patrol by the Lebanese militants Hezbollah near the town of Metulla on Monday - a charge denied by the group.
Early on Tuesday a Lebanese boy was killed when a missile fell on his house - possibly falling short of a target in Israel.
The deaths come amid heightened tensions in the region, after
Israel targeted an alleged Palestinian militant camp in Syria in response to Saturday's suicide bomb attack in Haifa, which left 19 dead.
Syria denies the target was a training camp and has called on the United Nations to condemn the Israeli action as "military aggression".
However, a draft resolution tabled to the UN Security Council was returned to Damascus on Monday for further consideration.
Earlier, US President George W Bush backed Israel's right to defend itself, although he urged Israeli Prime Minister Ariel Sharon to avoid further escalating tensions in the region.
The soldier was the first Israeli casualty on the northern border since August.
The Israeli military said Hezbollah forces in Lebanon shot the soldier as he patrolled the border and Israeli troops then returned fire.
"Syria is responsible for what's happening here, by letting the terror groups act freely," said Major General Benny Gantz.
But Hezbollah - backed by Syria and Iran - denied it was involved in the incident, while Lebanese officials said the shooting had not begun on their side, maintaining Israeli troops fired at two vehicles on a road in the south of the country.
A UN official told Reuters that one of its water trucks had been hit by three bullets from the Israeli side. No one on the Lebanese side was hurt, said officials.
The four-year-old Lebanese boy died in the Lebanese village of Houla early on Tuesday, but it was unclear whether the explosion was caused by anti-aircraft fire or a missile aimed at Israel falling short of its target.
The Israeli army said that three shells were fired at its positions, and sent jets and helicopter gunships over the border on reconnaissance missions.
Israel said Sunday's air strike targeted a training camp run by Islamic Jihad, the group it accuses of carrying out a suicide bombing in the coastal town of Haifa the day before.
Speaking in Washington, Mr Bush said: "Israel must not feel constrained in terms of defending the homeland.
"However, I said that it's very important that any action Israel take should avoid escalation and creating higher tensions."
The US president condemned the "needless murder" of the Haifa bombing, and called on the Palestinian Authority to fight what he called the terrorists trying to prevent the creation of a peaceful Palestinian state.
He did not say whether the United States would veto a UN resolution condemning the attacks in Syria.
But the US has accused Damascus of being on the wrong side in the war on terror, and our correspondent says Washington is likely to have little time for a resolution that does not also condemn the attack in Haifa.