A full withdrawal would pave the way for the 4,500-strong UN peacekeeping force, Unifil, to be strengthened and deployed along the border.
But the Lebanese Government rejected the UN verification, saying Israeli forces were still in control of some part of Lebanese territory.
UN Secretary-General Kofi Annan said Israel had complied fully with 1978 UN resolutions demanding an end to the occupation of its self-proclaimed security zone inside Lebanon.
A full withdrawal would pave the way for the 4,500-strong UN peacekeeping force, Unifil, to be strengthened and deployed along the border.
The Lebanese Prime Minister, Selim al-Hoss, said Lebanese officers working with the UN team had found that there were still several Israeli military outposts inside the Lebanese border.
Rival skirmishes
"There are several tracts of Lebanese territory under Israeli control in a flagrant act of encroachment," Mr Hoss said.
He said he did not think the UN Secretary-General Kofi Annan would have made the announcement if he had been informed of all of the facts.
UN officials said talks are expected to be held with the Lebanese on Saturday to go over the points that have been raised.
Much of the evacuated territory is now controlled by Iranian and Syrian-backed Hezbollah fighters, whose attacks on Israeli troops were decisive in persuading Israel to end its occupation of south Lebanon.
The expanded Unifil force would have the task of keeping the peace and helping the Lebanese government to reassert its authority.
Reports from the area say there have been clashes involving members of rival Shiite Muslim groups Hezbollah and Amal, since the withdrawal.
Five men were said to have been injured when their car came under fire. In another incident, two men were injured by gunfire.
UN pride
Supporters of the two groups are said to have clashed over the placing of posters of their leaders in a number of villages.
Mr Annan, who says he will leave immediately for the Middle East, described the UN announcement as a "happy day for Lebanon but also for Israel."
"It is a day for hope for the Middle East as a whole. And it is a day of pride for the United Nations," Mr Annan said.
Israeli forces pulled out of Lebanon in May ending a 22-year occupation.
Since then, UN officials have been checking that all Israeli troops and officials have withdrawn behind an international border demarcated in 1923.
The detailed process has been delayed by disagreements between the UN and Lebanon.
On Thursday, work was suspended after Israeli troops fired over the heads of the peacekeepers as they tried to enter a border village.
Israel apologised for the incident.