The Israeli military has struck what it says are posts belonging to Lebanon's Shi'ite Hezbollah movement after shots were fired from the other side of the border towards its troops.
After a meeting, Lebanon's Supreme Defence Council denounced the incident which it called "an Israeli assault" and said a complaint would be filed to the United Nations.
The Lebanese army said on its Twitter account that Israeli helicopters had fired missiles at centres of a local environmental group.
Tension has been running high on the border. Last month, Israel said Iran-backed Hezbollah had carried out an infiltration attempt, which the group denied.
The Israeli military said no troops were wounded in the firing on Wednesday. Soldiers deployed illumination flares, smoke shells and live fire after the shots from the Lebanese side of the frontier, it said.
"In response, overnight, IDF attack helicopters and aircraft struck observation posts belonging to the Hezbollah terror organisation in the border area," the military said in a statement, referring to the Israel Defence Forces.
There was no immediate comment from Hezbollah. The two sides last fought a deadly month-long war in 2006.
Witnesses in south Lebanon said Israel had fired scores of flare munitions at border villages.
The statement from Lebanon's defence council, which includes the president and top security officials, made no mention of any shots fired from the south towards Israel.
It said Lebanon's army commander had briefed the council on "the denounced Israeli assault which took place last night at the southern border."
The Israeli military said it lifted a curfew it had imposed overnight.
"Israel views with great gravity Hezbollah's firing at our forces," Prime Minister Benjamin Netanyahu said in a statement on Wednesday morning. "We will respond mightily to any attack on us."