Israel fired at least six shells on areas in southern Lebanon shortly after unknown militants fired a Katyusha rocket that slammed into northern Israel early Saturday, dpa reported.
Lebanese Prime Minister Fouad Seniora meanwhile denounced the attack from its territory and also Israel's response.
The Israeli shells impacted near the village of Qlalieh, located ten kilometres from the border with Israel, causing panic among local residents who fled the area.
According to a Lebanese army source the rocket platform which was used in launching the rocket into Israeli territories was found in a field near the village of Hiniyeh close to Qlalieh.
The source said at least two rockets were fired. While one struck northern Israel, the other blew up in a non-residential area inside Lebanese territory.
Israeli public radio said one rocket landed near the Israeli town of Maalot near the Lebanese border, slightly injuring a woman.
In a statement denouncing the rocket attack and Israel's response, Seniora said: "The firing of rockets from south Lebanon and the Israeli response is a violation of UNSCR 1701.
"Such acts are rejected and denounced at a time when Israeli aggression towards Lebanon is repeated." UN Security 1701 ended the 33-day Israeli onslaught on southern Lebanon in July 2006.
A statement by the Lebanese army said "an unknown and suspected source fired two rockets from the south Lebanon (towards Israel)." It added that the investigation was ongoing.
Meanwhile, Lebanese army troops and the United Nations Interim Forces in Southern Lebanon (UNIFIL) set up checkpoints and were searching passing cars.
In January, rockets were fired on two occasions from Lebanon into northern Israel. The attacks raised fears that the war in Gaza at the time could spread. No group claimed responsibility for those attacks.
Sultan Abul Ainein, Secretary-General of the Palestinian group Fatah in Lebanon, said no faction of the Palestine Liberation Organisation PLO was connected to Saturday's rocket attack. A Hezbollah source also denied any involvement and expressed surprise.