Major General Beni Gantz, head of northern command, said the Israelis had sustained no casualties in the exchanges which lasted for around an hour although several houses in a local Druze village had been damaged in an attack which he said would have taken place with the knowledge of Hezbollah's Syrian backers.

"Hezbollah opened fire on our area with several dozen shells and anti-tank (rockets) and some form of rocket," Gantz said. "A few shells fell by northern sides of the Golan Heights."

Gantz would not give details of the size of the force used by Israel in response to the attacks but confirmed that helicopter gunships and warplanes had been involved around the disputed Shebaa Farms border region which also lies close to Syria.

A source close to Israeli Prime Minister Ariel Sharon had earlier said the attacks may reflect "the frustration of Hezbollah and its foreign backers", in a reference to Iran and Syria, at the relative downturn in attacks against Israel since Palestinian groups called a ceasefire on June 29.

Lebanese police said that Israeli warplanes had bombed the fringes of villages in south Lebanon on Friday after militiamen of the radical Shiite Muslim group attacked Israeli army posts.

Fighter bombers swooped four times to fire missiles at targets on the outskirts of Kfarshuba, Hebbariyeh, Slamiyeh and Kfarhamam near the Shebaa Farms, they said.

At the same time, Hezbollah traded artillery fire with Israeli troops.

The militia pounded Israeli positions on the slopes of Mount Hermon with dozens of mortar bombs and 107 mm Katyusha rockets, police said earlier, in the first such action for several months.

An AFP correspondent saw a large cloud of black smoke rising from one Israeli position, known as Radar, that was the target of about 30 missiles. Two other army posts were also targeted.

Hezbollah said it had carried out its dawn onslaught in retaliation for the death of one of its militants in a Beirut car bomb blast last week which it blamed on Israeli agents.

Gantz said the "Jihadi (holy war organisation) would find any excuse to justify their cause."

WAR.WIRE