An Israeli soldier has died in clashes with Lebanese fighters from Hezbollah group in an area where Syrian, Lebanese and Israeli borders meet.
The area has seen sporadic outbreaks of violence
Hezbollah fired mortars and rockets at several Israeli army positions in the area, known as the Shebaa Farms.
The Israeli military shelled areas around several villages in southern Lebanon and planes launched missiles.
Correspondents say it is the most serious clash in the area since January, when three people died.
The United Nations said there were contradictory claims about how the clashes started, and the group was in contact with both sides.
Hezbollah fired Katyusha rockets and mortars at two Israeli outposts in the Shebaa Farms area and shelled another in Israeli-occupied Syrian territory.
After the initial salvoes, Israeli warplanes bombed areas around the two villages, Kfarshuba and Shebaa.
An Israeli military official said the strikes targeted suspected Hezbollah positions.
The warplanes fired six missiles, Lebanese security sources said.
It is not clear if there are any Hezbollah casualties.
The water-rich Shebaa Farms lie at the convergence of Israeli, Lebanese and Syrian territory.
They were captured by Israel from Syria in 1967 but the area is now claimed by Lebanon, with Syrian backing.
The United Nations has ruled that the area belongs to Syria and says its fate is linked to the occupied Golan Heights - which is subject to separate UN resolutions telling Israel to leave.