Hezbollah leader Sheikh Hassan Nasrallah said Wednesday that his Shi'ite militant group is ready to repulse any future Israeli attack, despite internal tension in Lebanon over a UN-backed tribunal investigating the 2005 assassination of former Lebanese Prime Minister Rafik Hariri.

"The resistance is working day and night and training day and night," Nasrallah said.

Late on Wednesday, an explosion was heard near the southern Lebanese port city of Sidon.

Residents in the area also observed red flames in conjunction with the explosion, which came from the sea, a local security source said.

He added that "it might have been a naval mine."

"Israeli helicopters were seen hovering over the area when the explosion took place," the source said, without providing further information.

According to local media reports, a number of Israeli warships were seen of the coast of Sidon and Israeli aircraft made sonic booms and released flares overhead.

The Israel Defense Forces reported no unusual activity in the area.

In his speech on Wednesday, Nasrallah accused Israel of spying on Lebanon with radars hidden underground that send pictures day and night.

Nasrallah's speech came after an announcement earlier in the day by the Lebanese army that military experts had discovered and dismantled two Israeli spy cameras planted in the country's mountains.

The military was tipped off about the systems by Hezbollah, the army statement said.

Hezbollah, which is backed by Iran and Syria, holds veto power in the Lebanese government.

One of the long range spying systems was placed on Sannine mountain, which overlooks Beirut and the eastern Bekaa Valley, and the second was on Barouk mountain, southeast of the capital, the army said in a statement.

The system found in Sannine included a camera, a device to send images and a third to receive signals, the army said. The device found in Barouk was "much more complicated."

The cameras, equipped with an independent power supply, could establish coordinates of targets and included lasers capable of reaching 20 km (12 miles) away.

One military source said the equipment dismantled on Wednesday could also have monitored a large swathe of Lebanon's border region with neighbouring Syria.

Pictures released on the Lebanese army's website (www.lebarmy.gov.lb) appeared to show devices partly covered by stones on the slopes of rocky hills.

Shortly after the army announcement Israeli warplanes flew at low altitude over towns in south Lebanon, residents said.

The army said it plans to remove the cameras and urged citizens to inform authorities about any suspicious objects they find.

The IDF had no immediate comment on the matter.

Earlier this month, Hezbollah said it discovered an Israeli device spying on its private telecommunications network.

Lebanon and Israel are officially in a state of war. More than 100 people in Lebanon have been arrested since last year on suspicion of collaborating with Israel.