The Israeli army is to investigate the way cluster bombs were used during the recent conflict with Hezbollah.
Cluster bomblets are still being found across southern Lebanon
The chief of the defence staff has said he prohibited the wide use of the munitions during the conflict.
But human rights observers in southern Lebanon say up to a million "bomblets" were left in the country after the war.
Israel's decision came as a new Amnesty International report called for a UN-led probe into the conduct of Israel and Hezbollah during the conflict.
Amnesty's report said Israeli attacks into Lebanon were "indiscriminate and disproportionate".
It also criticised Israel for its apparent use of cluster bombs during the final days of fighting.
A separate report by UN investigators - the Human Rights Council - accused Israel of flagrant human rights violations during the conflict, saying the using of cluster munitions was a deliberate tactic.
Israel has already dismissed the report's findings as one-sided.
More than 20 Lebanese people have been killed by the bomblets since the end of the conflict.
Israel has previously insisted that it uses munitions only in accordance with international law.
The BBC's Crispin Thorold in Jerusalem says Israel is going through an extensive period of self-examination after the conflict with Hezbollah.
There are now several internal inquiries running into the government's and the army's handling of the war.
Announcing the inquiry, Chief of Staff Lt Gen Dan Halutz said the use of cluster bombs in the conflict was "disappointing".
"We must check whether the instructions were clear, I believe they were," Israel's Army Radio reported him saying.
But our correspondent says one junior infantry officer recently told the BBC that the use of cluster bombs was, in his words, pre-meditated.
The pressure groups Human Rights Watch and Amnesty International have both criticised Israel for firing cluster bombs into southern Lebanon during the 34-day conflict.
In its latest report, Amnesty asserts that civilians on both sides bore the brunt of the fighting.
As well as highlighting the issue of cluster bombs, Amnesty found that Hezbollah hid Katyusha rockets among civilians and often fired them into Israel from the cover of civilian villages.
Amnesty has criticised both Israel's and Hezbollah's tactics
But Amnesty International researchers found no evidence that Hezbollah actually used civilians as human shields during the fighting.
Malcolm Smart, programme director for Amnesty International in the Middle East and North Africa, said a UN-led inquiry was "urgently needed".
"Anything less would be a gross betrayal of the civilian victims, more than 1,000 of whom were killed, but also a recipe for further civilian bloodshed with impunity."
The report calls on Israel to renounce "collective punishment" as a military tactic and to abandon the use of cluster bombs and white phosphorous in civilian areas.
Hezbollah is asked to renounce its policy of reprisal rocket attacks into Israel, to stop fighters operating from civilian areas, while the government of Lebanon is urged to ensure armed groups on its territory - essentially Hezbollah - do not break humanitarian law.
Israel launched its offensive after Hezbollah militants seized two of its soldiers and killed several others during a cross-border raid on 12 July.
During the conflict Hezbollah fired thousands of rockets into northern Israel, while the Israeli military launched a vast air offensive across Lebanon and a ground invasion into the south.
About 1,000 Lebanese - mostly civilians - died in the conflict, while 161 Israelis, mainly soldiers, were killed.