Lebanon's Hezbollah said it fired a barrage of rockets near Israeli positions close to the Lebanese border on Friday, calling it retaliation for Israeli airstrikes on southern Lebanon a day earlier.
Israel said it was firing back after at least 10 rockets were launched from Lebanon, and Prime Minister Naftali Bennett swiftly convened a meeting with the country's top defence officials.
The rising tensions were the latest friction and a significant escalation between Israel's new government and Iran-backed Hezbollah.
The U.N. peacekeeping force deployed along the border said it detected rocket launches from Lebanon and artillery fire by Israel in response.
"This is a very serious situation and we urge all parties to cease fire," the force known as UNIFIL said.
Sirens blared across the Golan Heights and Upper Galilee near the Lebanon border Friday morning.
Hezbollah said in a statement that it hit "open fields" near Israeli positions in the disputed Shebaa farms area, with "dozens" of rockets.
No casualties were reported.
Shebaa Farms is an enclave where the borders of Israel, Lebanon and Syria meet. Israel says it is part of the Golan Heights, which it captured from Syria in 1967.
Lebanon and Syria say Shebaa Farms belong to Lebanon, while the United Nations says the area is part of Syria and that Damascus and Israel should negotiate its fate.
Israel said most of the rockets from Lebanon were intercepted by the defense system known as the Iron Dome. The rest landed in open areas.
Manar TV, run by Hezbollah, says Israeli warplanes were flying at low-altitude over southeast Lebanon.
That followed rare Israeli airstrikes on Lebanon a day earlier, a marked escalation at a politically sensitive time. Israel's new eight-party governing coalition is trying to keep peace under a fragile cease-fire that ended an 11-day war with Hamas' militant rulers in Gaza in May.