At least five people have been killed and eight Israeli commandos injured in a raid near the Lebanese port city of Tyre.
Israel said the troops landed in Tyre by sea on Saturday and destroyed a Hezbollah unit.
"Guided by very precise intelligence, navy commandos entered an apartment on the second floor of a five-story building in the north of Tyre where they killed at least three Hezbollah leaders," a senior Israeli naval commander said.
"These three men were notably responsible for firing a missile against the city of Hadera" late Friday, he said.
Friday’s missile strike on Hadera caused no casualties but was the furthest south that Hezbollah rocket attacks have reached.
Before departing, the Israeli force also killed and wounded several other Hezbollah fighters who had launched a counter-attack on the raiders.
"Our commandos were able to retreat and to hit with counter-strikes six to eight terrorists from neighboring buildings, killing some of them, and to return to Israel with aviation support," the Israeli naval officer said.
"We could have contented ourselves with liquidating these terrorists with a missile strike, but we launched this risky raid to spare innocent lives and to prove that we are capable of reaching terrorists wherever they are," he said.
Israeli forces were supported by air strikes from helicopter gunships and fighter-bombers.
Hezbollah said its fighters repelled the attackers, killed an Israeli member of the force and wounded others.
Also, a Lebanese soldier was among the five killed in the commando raid, a Lebanese army officer said.
One Israeli soldier was killed and another wounded in fighting around the Lebanese village of Taibe.
Also on Saturday, Israeli aircraft repeatedly bombed Beirut’s southern suburbs. There were no reports of any casualties, local television and radio stations said. The Israeli army confirmed the raids, saying it had hit nine buildings used by Hezbollah.
In eastern Lebanon the road linking the town of Hermel with the Syrian city of Homs was attacked, residents said. The road was closed because of heavy damage. Further strikes hit areas in the eastern Bekaa Valley.
Moreover, Israeli aircraft again dropped warning leaflets on the southern market town of Nabatiyeh during the night, urging civilians to move north "immediately, for your own safety".
David Welch, the US Middle East envoy, has arrived in Beirut to discuss a draft UN resolution with Lebanese officials. He has met Nabih Berri, the Lebanese parliament’s speaker – a key negotiator with Hezbollah.
It was unclear whether he would meet Fuad Siniora, the prime minister, officials said.
France and the US remain divided over the draft. Paris wants existing UN peacekeepers and Lebanon’s army to monitor a truce but Washington wants the Israeli army to stay in southern Lebanon until an international force arrives.
The Lebanese government says at least 880 of its civilians and 27 police or government troops have been killed since the fighting began. Forty-four Israeli soldiers and 30 civilians have also died.