The Lebanese Shia militant group, Hezbollah, has fired several anti-tank rockets into northern Israel in retaliation for a reported Israeli drone attack in Beirut last week.
Israeli military sources confirmed that rockets were fired towards an Israeli army base and military vehicles.
The Israeli army responded by attacking targets in southern Lebanon.
Hezbollah sources claimed several Israeli casualties, but Israel said no one was injured on its side.
The Lebanese military earlier said an Israeli drone had entered its airspace and dropped incendiary material on a forest along the border.
The Israeli army has acknowledged it started a fire. Tensions on the frontier have escalated in recent days.
Hezbollah, which is backed by Iran, has threatened to carry out an attack against Israel.
It accuses Israel of trying to carry out a drone attack in Lebanon’s capital Beirut last week.
What’s the latest?
According to the Israel Defense Forces (IDF), “Hezbollah fired two to three anti-tank missiles from Lebanon, hitting an IDF military outpost and ambulance in northern Israel.
“We fired at the Hezbollah squad responsible. No Israelis were injured in the attack,” the IDF said in a tweet.
Radio reports from northern Israel say that residents in some border communities have been sheltering in bunkers after suffering sustained rocket attacks.
Meanwhile, Hezbollah is quoted by local media as saying the movement destroyed an Israeli tank, killing and injuring those on board.
However, it provided no evidence. Israel said it sustained no casualties.
In 2006, Israel and Hezbollah fought a month-long conflict that killed more than 1,000 civilians, most of them Lebanese.