Israel launched a wave of airstrikes across southern Lebanon early Sunday in what it called a preemptive strike to avert a large Hezbollah rocket and missile attack.
The militant group responded, saying it fired hundreds of rockets and drones to avenge the killing of a top commander last month.
Both sides halted the heavy exchange of fire by mid-morning, signalling no immediate further escalation. It came as Egypt hosted high-level talks aimed at a cease-fire in the 10-month-old IsraelHamas war in Gaza that diplomats hope will ease regional tensions.
Both Israel and Hezbollah said they aimed only at military targets. Israel's military said one soldier with the navy was killed and two others were wounded either by an interceptor for incoming fire or by shrapnel from one. Two Hezbollah fighters and a militant from an allied group were killed, the groups said.
Hezbollah called its attack on Israeli military positions an initial response to the killing of Fouad Shukur in an Israeli airstrike in Beirut last month.
Hezbollah's leader, Hassan Nasrallah, was expected to speak later Sunday.
Israeli Prime Minister Benjamin Netanyahu said the military eliminated thousands of rockets that were aimed at northern Israel and shot down drones heading for the centre of the country.
"I repeat this is not the end of the story," he added.
Air raid sirens were reported throughout northern Israel, and Israel's international airport closed and diverted flights for about an hour. Israel's Home Front Command later lifted restrictions in most areas.
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