Israel and Hezbollah, a Hamas ally, have stepped up cross-border exchanges that have been ongoing following the Palestinian group's October 7 attack on southern Israel that sparked the war in Gaza.

According to the Lebanese security source, "two Hezbollah fighters" were killed in an Israeli air strike on the border town of Adaisseh.

A separate strike on the village of Khiam killed three people who were likely "Palestinian combatants", the source said.

AFP pictures showed a huge cloud of smoke rising above Khiam following a strike.

Earlier Wednesday the Israeli military said that its "artillery and fighter jets struck over 20 Hezbollah terror targets" in southern Lebanon.

"During the strikes, secondary explosions were identified, indicating the presence of weapon storage facilities in the area," it said in a statement.

Hezbollah meanwhile said its forces carried out at least 11 attacks against northern Israeli army positions across the border, using drones and "guided missiles".

A statement from the Iran-backed Lebanese group said six of those attacks were "in retaliation for enemy attacks against villages, homes and civilians" in southern Lebanon.

At least 395 people have been killed in Lebanon in seven months of cross-border violence, mostly militants but also more than 70 civilians, according to an AFP tally.

Israel says 13 soldiers and nine civilians have been killed on its side of the border.

Tens of thousands of people have been displaced on both sides.

On Wednesday a Lebanese official said Israeli bombardment of south Lebanon since the start of the Israel-Hamas war has caused more than $1.5 billion in damage.