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Israel's Prime Minister Benjamin Netanyahu praised the EU decision Monday to blacklist Hezbollah's armed wing, saying the Iran-backed Shiite group has imposed a "terrorist" rule on large parts of Lebanon.
"I welcome the fact that the EU has also declared Hezbollah to be a terrorist organisation and I thank the leaders of its member states," Netanyahu said in a statement.
Hezbollah "has imposed terrorist rule on wide sections of Lebanon, has converted them into an Iranian protectorate and is stockpiling tens of thousands of rockets there.
"These have been placed in the heart of civilian populations and are designed to be fired at population centres in Israel," he said.
Hezbollah, which is close to Iran, is Israel's sworn enemy and the militant group's recent involvement in Syria alongside President Bashar al-Assad's forces has also dismayed Western powers which back rebels battling the Damascus regime.
The European Union on Monday added Hezbollah's military wing to its list of "terrorist organisations" despite Lebanon warning against such a move.
The EU decision came after some of its 28 foreign ministers overcame reservations in some member states that such a move would further destabilise Lebanon where the militant group plays a major role.
To do so, ministers agreed that EU political and economic links with Lebanon would be maintained.
They also highlighted the fact that it is the military wing alone that is blacklisted after Hezbollah was blamed for a deadly attack on Israeli tourists in Bulgaria last year.
Israeli President Shimon Peres said the blacklisting of Hezbollah's armed wing was a significant step.
"I welcome the European Union's decision regarding Hezbollah, a significant and necessary step towards putting an end to the spread of terror across the globe," Peres said.
"Your decision sends a clear message to terror organisations, and the countries which harbour them, that their murderous actions will not be tolerated," he said in a separate statement.
Israeli Justice Minister Tzipi Livni said the EU move dismisses claim that Hezbollah is a political party.
"Finally, after years of deliberations, the claim that Hezbollah is a legitimate political party has rightfully failed. Now it is clear to the entire world that Hezbollah is a terrorist organisation", Livni said in a statement.
Israel and Hezbollah fought a deadly war in the summer of 2006.