Israel's president says Hezbollah has turned Lebanon into a "powder keg", after an explosion at a member of the group's house near Tyre on Monday.
Shimon Peres said the Shia Islamist group was preventing the country making peace with Israel and possibly becoming "the Switzerland of the Middle East".
Earlier, Israel's army released a video purportedly showing munitions being removed from the house after the blast.
Both Hezbollah and the Lebanese army have said one person was wounded.
The army and UN peacekeepers in southern Lebanon are investigating whether the building might have been used to store weapons in violation of UN Resolution 1701, which ended the war between Israel and Hezbollah in the summer of 2006.
Israel said it had proof munitions were removed from the house after the blast
More than 1,200 Lebanese, mostly civilians, were killed during the 34-day conflict, as well as 160 Israelis, most of whom were soldiers.
Residents of the village of Tayr Filsi, which lies on the southern bank of Litani River, say Hezbollah member Abdel Nasser Issa had found a rocket near his home on Monday and was trying to dismantle in his garage when it blew up.
But on Tuesday evening, the Israeli army released video taken by a drone which it said showed several rockets being removed from Mr Issa's home after the blast.
"Hezbollah has turned Lebanon into a powder keg," Mr Peres said.
"It's not Israel that is endangering Lebanon, but rather Hezbollah, just as Hamas is endangering the Palestinians."
"There is no reason for Israel not to make peace with Lebanon," he stated, adding that Israel's neighbour "could be, with the help of this peace, the Switzerland of the Middle East".
"But it's clear to everyone who is preventing this."
Hezbollah MP Hussein Haj Hassan told the Associated Press that Israel was exaggerating the incident "for political interests".
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