The Israeli military said the raid on a hill outside the village of Tayr Harfa destroyed the gun used by fighters of the radical Shiite Muslim militia to lob the deadly shells.

"Two Israeli planes at 4:30 pm (1330 GMT) fired two missiles at a hill in Tayr Harfa," near the coastal town of Naqura close to the border, a Lebanese police officer told AFP, without reporting casualties.

Local residents said a Hezbollah anti-aircraft post took a direct hit.

Earlier, an Israeli was killed and five wounded in what Israel said was the second border attack in three days by Hezbollah, fueling fears in the Jewish state of the reopening of a northern front after a seven-month lull.

The Shiite group said it only fired anti-aircraft guns at Israeli warplanes overflying Lebanon, but Israel said Hezbollah had fired shells across the border in a deliberate attack, and swiftly mounted the retaliatory strike.

The incident came as Israel was already stepping up pressure on Syria and Lebanon to end their support for Hezbollah, and was considering seeking a special session of the UN Security Council to discuss the situation.

Israeli public radio named the dead Israeli as 16-year-old Habib Dadon, while medical sources said one of the five wounded in the northwestern town of Shlomi was in serious condition.

Israel's Prime Minister Ariel Sharon later met his military chiefs to discuss "a range of Israeli retaliatory options" in case of further Hezbollah attacks, security sources in Jerusalem said.

Air strikes were among the options agreed upon, they said.

"Israel can not just do nothing in the face of these attacks, but we do not want a military escalation with Syria and Lebanon," an Israeli official said after the meeting, asking not to be named.

In the southern Lebanese town of Khiam, a senior Hezbollah official said his fighters would keep firing at Israeli warplanes.

"The resistance is capable of responding to Israel's violations and provocations," said Hezbollah's chief for south Lebanon, Sheikh Nabil Qauq, referring to the almost daily violations of Lebanese airspace.

"We want to stop Israeli planes from continuing to violate our sovereignty and make such violations costly for the Israeli military command," Qauq said.

He also defied Israeli and US protests, stressing the group's fighters would continue attacks on the Shebaa Farms, which Israel captured from Syria in the 1967 Middle East war.

The disputed border area is claimed by Beirut with the Damascus' consent.

Sunday's incidents came two days after a first Hezbollah rocket attack in seven months on the Shebaa Farms. Hezbollah said it was to avenge the August 2 death of one of its militants in a Beirut car bomb blast that the group blamed on Israel.

UN Secretary General Kofi Annan on Sunday condemned the firing of shells into Israel.

The shelling "represents a serious violation of the Blue Line and of Security Council's resolutions," Annan said in a statement, adding he was "deeply concerned by the current escalation in the area."

The UN chief urged "all governments that have influence on Hezbollah to deter it from any further actions which could increase the tension in the area," while calling on Israel "to exercise utmost restraint".

Israel lodged a complaint on Saturday with the UN Security Council against Syria's support for Hezbollah, while the United States has warned both Beirut and Damascus to restrain the militia.

Lebanon hit back with its own complaint to the Security Council on Sunday against Israeli "aggression, threats and continuous provocative violations of Lebanese airspace and sovereignty," the foreign ministry in Beirut said.

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