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Late last night, an Israeli tank fired two rounds against the Lebanese Army - against an outpost and an armored vehicle - close to the community of Avivim, along the border fence, in response to gunfire targeting Israeli troops operating in a salient inside Israeli territory.

This was the worst incident of its kind since the end of the second Lebanon war on August 14 and the deployment of Lebanese Army troops in the area as part of a United Nations-brokered cease-fire.

The Israel Defense Forces suffered no casualties, but there were unconfirmed reports of Lebanese Army losses.

The incident followed a day of tension, as Israeli troops entered the area between the fence and the internationally recognized border with several bulldozers, seeking to destroy explosive devices Hezbollah planted there.

Earlier this week, four explosive devices were discovered in the area. IDF sappers detonated them from a distance.

The IDF carried out yesterday's operation after informing the United Nations Interim Force in Lebanon (UNIFIL) and the Lebanese Army of its intentions.

In response, the Lebanese Army warned the IDF that if its forces violated Lebanese sovereignty, it would open fire.

The IDF said that it did not intend to cross into Lebanese territory, but if its forces were attacked, it would response.

Israel rejected Hezbollah's claims that it had violated Lebanese sovereignty, saying that the force was south of the international border - inside Israel - as delineated by the United Nations following the IDF pullout from southern Lebanon in May 2000. In some places, the border and the fence are several dozen meters apart.

The IDF operation in the area caused grave concern on the Lebanese side, and drew the attention of the Lebanese Army.

Israel imposed a local media blackout, which was lifted as soon as Hezbollah's Al-Manar went on the air with information about the operation. Al-Manar gave the operation a great deal of coverage, reporting that an Israeli armored column tried to cross into Lebanon close to Maroun al-Ras, which is across from Avivim.

The report stated that UNIFIL and a Lebanese Army officer held discussions with Israel, after which Israel agreed to cancel the mission.

The Lebanese News Agency reported that the Lebanese Army placed forces deployed near Maroun al-Ras on alert, fearing that the IDF planned to broaden its operation. It was also reported that IDF helicopters flew over southern Lebanon villages.

Northern Command was unable to confirm whether the explosive devices had been placed recently. Hezbollah, for its part, denied Tuesday that these were new bombs, saying they had been placed before the war in July.

A GOC Northern Command officer said yesterday that Hezbollah is still operating in southern Lebanon, but is keeping a low profile - its operatives avoid public displays of weapons, and wear civilian clothes.

Northern Command sources report that Hezbollah is working hard to replenish its ranks, sending conscripts for training in the Beka'a, in order to make up for its losses during the war.

The officer said there has been a growing presence of Islamic Jihad militants in southern Lebanon, as well as extremists affiliated with Al-Qaida and Sunni groups. These groups are seeking to challenge Hezbollah's hegemony in the area.

The IDF officer said the army intends to clear all salients between the border and the fence of explosives.

"Our way of thinking has changed," the officer said. "Before the war, the approach was that confrontation was bad for us, and therefore we kept away from the fence. Now the approach is that we will operate up to the Blue Line [the international border] and if the other side seeks a confrontation, it will get it," the officer said.

Meanwhile, Prime Minister Ehud Olmert held a meeting with Defense Minister Amir Peretz, Foreign Minister Tzipi Livni and senior security officials regarding developments along the northern border and the Gaza Strip.