Rebels fighting troops loyal to Damascus on Thursday briefly seized the only crossing along the Israel-Syria ceasefire line in the Golan Heights, before regime forces recaptured it, an AFP correspondent and Israeli sources said.
The Quneitra crossing is in the demilitarised zone on the Golan Heights, most of which Israel seized from Syria in the 1967 Six-Day War.
It has both strategic and symbolic importance because of its proximity to Israel and to the Syrian capital.
"The Syrian army has recovered control of the crossing, there are sounds of explosions from time to time but far less than in the morning," an Israeli source told AFP, speaking on condition of anonymity.
An AFP correspondent near the crossing also confirmed that forces loyal to President Bashar al-Assad had taken back Quneitra, saying he could see tanks moving inside the area.
The Israeli military earlier confirmed that the crossing and the nearby town of the same name had fallen into rebel hands.
"We can confirm that opposition forces have overrun the town of Quneitra and the border post but it's not exactly clear who they are," said Captain Arye Shalicar.
But he was unable to confirm that government forces had retaken the area, saying the situation was still developing.
The Syrian Observatory for Human Rights, a Britain-based group that monitors Syria's two-year conflict, had also confirmed the takeover by rebel forces.
"We are watching very closely what is happening there and we have to be ready for any development," Shalicar said. "We hope there won't be any spillover into Israel."
Israel fears that the bloody fighting over the border could leave a vacuum on the Syrian side of the strategic plateau, leaving it open to infiltration by hardline militant groups bent on attacking the Jewish state.
"It is very worrying because on the one hand you have jihadists and Islamists who are fighting there, and on the other hand, you also have government forces which are allied with Hezbollah," a security source told AFP, referring to the Lebanese militia group which has allied itself with Assad's regime.
"We certainly don't want to have Hezbollah on two fronts."
The fear was that the crossing would fall into the hands of elements with an unknown agenda, "by people who we don't know, whose purpose we don't know," he said. "We don't know whether they are with us or against us."
Also located at Quneitra is the headquarters of the UN Disengagement Force, which counts some 1,200 peacekeepers.
Since 1974, UNDOF forces have been charged with monitoring the ceasefire between Syria and Israel.
In Manila, the Filipino military said one of its peacekeepers in UNDOF was wounded in the leg by shrapnel.
UN officials said only that there had been "shots" in the area and that they were following the situation "extremely closely".
During the morning, the Israeli army said two mortar rounds struck near the Golan town of Majdal Shams, and two badly wounded Syrians were let in through Quneitra and taken to Ziv hospital in the Galilee town of Safed.
It was not immediately clear whether they were rebels, government troops or civilians caught in the crossfire, but Ziv hospital said that a live grenade had been found on one of them, sparking a brief security scare.
"A live hand grenade was discovered on one of two wounded Syrians brought this morning by the IDF (army) for treatment at Ziv medical centre," a statement said.
"The grenade was found as doctors treated a seriously wounded and unconscious person. When they began removing his clothes they found in his pocket the live grenade. The area of the trauma room and adjacent operating theatre was evacuated."
It was quickly defused by bomb disposal experts, it said.
Quneitra crossing is used almost exclusively by Druze residents of the Israeli-occupied Golan Heights who are allowed to cross over to study, work or get married.
Israel seized a large section of the strategic plateau from Syria in the 1967 Six-Day War and annexed it in 1981, in a move never recognised by the international community.
Israel and Syria are still technically at a state of war.