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The Israeli army said Monday it fired across the Lebanese border in retaliation after accusing Lebanese troops of gunning down one of its soldiers as he drove near the frontier.
The shooting was the first time an Israeli soldier had been killed along the border with Lebanon in more than three years, although commentators said it was unlikely to spark a confrontation.
Military officers from Israel, Lebanon and the United Nations will meet on Monday in an effort to defuse the situation.
The army said the soldier was shot by Lebanese troops as he was driving a civilian vehicle along a section of the border near Rosh HaNikra on the Mediterranean coast.
"After the incident, we reached the area to conduct searches as part of the investigation, and saw two suspects on the other side of the border," army spokesman Major Arye Shalicar told AFP.
Troops opened fire and hit at least one of them.
"We shot at them, and saw we hit at least one. We think they were Lebanese soldiers... involved in the shooting of the soldier," said Shalicar.
The army filed a protest with the UN peacekeeping force UNIFIL over the incident which it described as an "outrageous breach of Israel's sovereignty."
The military said it had "heightened its state of preparedness" and would maintain its "right to exercise self-defense."
Defense Minister Moshe Yaalon said the shooter was understood to be "a Lebanese soldier."
"We hold the Lebanese government and Lebanese army responsible for what happens on their side," he said.
Yaalon confirmed Israeli and Lebanese liaison officers would meet with UNIFIL to investigate the incident later on Monday.
"We will demand of the Lebanese army to explain exactly what happened and if this is a case of a soldier acting on his own initiative, what was done with him and how the Lebanese army plans to prevent a recurrence of such events," he said.
"We will not tolerate a breach of our sovereignty on any border, especially not the Lebanese one."
The army named the soldier as 31-year-old Master Sergeant Shlomi Cohen, and said "six to seven rounds" were fired at him. It was not immediately clear whether it was the work of a sniper.
There was no immediate reaction from the Lebanese army but it issued a statement Monday to the incident, but a statement saying an Israeli drone had violated Lebanese airspace in the same area.
"At 10:15 pm (2015 GMT) yesterday, a drone belonging to the Israeli enemy violated Lebanese airspace over Naqoura, and performed a fly-over of the southern area, then left at 12:40 am," it said.
Lebanon's National News Agency (NNA) reported that troops had opened fire at "an Israeli army unit" near the Naqoura border post.
But a security official denied soldiers had opened fire.
"The sound of gunfire was heard near the area of Ras al-Naqoura, and the army is trying to find out what happened," he told AFP.
UN peacekeepers urge restraint
UNIFIL spokesman Andrea Tinenti said the force was aware of a "serious" border incident and was trying to establish the facts.
"The situation is ongoing and the UNIFIL force commander is in contact with counterparts, urging restraint," he said.
Israeli commentator Amos Harel wrote in Haaretz newspaper that the shooting was unlikely to spark violence across the border.
"Neither Israel nor Hezbollah are seeking a comprehensive military confrontation, and the Lebanese government surely does not want to be drawn into such a conflict," he said.
Israel's border with Lebanon has been largely quiet since the 2006 war with the Shiite movement Hezbollah.
The last time a soldier was killed there was in August 2010, when two Lebanese soldiers and a journalist also died.
Four days ago, the Israeli army said shots were fired across the frontier by Lebanese "hunters" but there were no injuries.
In August, four Israeli soldiers were wounded by an explosion some 400 metres (yards) inside Lebanese territory, in a blast claimed by Hezbollah.
Last week, Hezbollah said one of its top leaders, Hassan Hawlo al-Lakiss, was killed near Beirut and blamed Israel for his murder -- a charge denied by Israel which warned against any retaliation.
UNIFIL troops were deployed along the border following the 34-day war in 2006 which killed some 1,200 people in Lebanon, mostly civilians, and 160 Israelis, mostly soldiers.