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Tension mounted Monday in southern Lebanon after Israeli forces reportedly advanced to the area of the Shaba farms, forcing the Lebanese army on alert, a Lebanese army source said.

The source said three armored Israeli vehicles, accompanied by a civilian car, advanced towards Shaba Farms, located at the junction of south-east Lebanon, south-west Syria and northern Israel.

Israel seized the 25-square-kilometre swath of land rich in water resources from Syria in the 1967 Middle East war when it captured the neighboring Golan Heights, which it later annexed.

Since then, the Shaba Farms have been caught in a tug-of-war between the three nations. Lebanon claims, with the backing of Syria, that Shaba is Lebanese. Meanwhile, Israel says the area is part of Syria and that their fate should be discussed in future peace talks with Israel.

The Lebanese army, stationed on its side of the border, has been placed on high alert, deploying tanks and positioning soldiers inside fortifications, the Lebanese military source added.

Prime Minister Benjamin Netanyahu on Monday denied reports that tensions were increasing between Israel and Lebanon, but stressed that the government in Beirut would be seen as responsible for any attacks on Israeli targets, including attacks perpetrated by Hezbollah.

Hezbollah's official entry into the Lebanese government takes away any line between the state and the militant group with that regard, Netanyahu said. "The government of Lebanon cannot just say 'that's Hezbollah,' and hide behind them," said the prime minister. "The government of Lebanon is in power and responsible."

Netanyahu's comments came a day after the exchange of rhetoric between Hezbollah and Israel escalated further Sunday, as a senior official for the organization, Hashem Safi a-Din, predicted that the "war of 2006 will seem like a joke" next to Hezbollah's reaction if Israel should attack.

Deputy foreign minister Daniel Ayalon said in response that, "if one hair on the head of an Israeli representative or tourist is harmed, we will see Hezbollah as responsible and it will bear the most dire consequences."

Israel's northern border has seen a rise in tensions since mid-July, when an explosion occurred in a Hezbollah munitions dump in the south of Lebanon. Commenting on Israel Radio on the arrest of a group in Cairo suspected of plotting to assassinate Israel's ambassador to Egypt, Ayalon said that "we know it's not just Egypt ... we know that Hezbollah has tried and is trying to collect intelligence and to carry out some actions ... it has had its failures but it keeps trying. So it's important to put things on the table and send this warning to Lebanon, which is eventually responsible for Hezbollah, that it will also be responsible for any harm it may suffer if Israelis are targeted."

A-Din said that while Hezbollah was not interested in war, the organization was on alert and prepared for any eventuality, including conflict. He was commenting on Ehud Barak's statements last Wednesday, in which the defense minister said that Israel was "not ready to accept a situation in which a neighboring country has in its government and parliament a milita that has its own policy and 40,000 rockets aimed at Israel."

Ayalon hinted that the Israel defense establishment believes Hezbollah intends to carry out soon its revenge attack for the death of Imad Mughniyeh, a top commander in the organization, who was killed when his car was blown up in Damascus in early 2008. Hezbollah believes Israel to be responsible for the assassination, a claim that Israel denies. Defense sources said they believe the organization would be especially motivated to carry out an attack to compensate for the embarrassment caused by munitions dump explosion.

According to Defense Ministry warnings, tourists and Israeli representatives abroad are thought to be likely targets. A bomb attack on Israel's embassy in Baku was foiled by Azerbaijani security forces in 2008.

Other comments by Israeli officials, including a senior commander in the Israel Defense Forces' Northern Command, who told The Times of London last week that the northern border "could explode at any minute," appear to indicate that Israel was preparing for a scenario in which a Hezbollah attack against an Israeli target abroad provokes a forceful Israeli reaction and, possibly, a new war.

Defense sources said, however, they believed the Hezbollah would try and calibrate an attack that, while effective, will not be able to serve as a casus belli. They noted the organization has not yet recovered from damages suffered in the war in 2006.

Also in recent weeks, Lebanese civilians continued staging protests near the border. Two weeks ago, several Lebanese civilians briefly infiltrated the Shebaa Farms.

Despite the warnings, some 330,000 Israelis departed the country for holidays abroad in the first week of August, while hundreds of thousands more are expected to leave during the holiday season of September-October. Most Israeli tourists will be traveling to Western Europe, North America and the Far East. The most popular destinations are Turkey, France, Germany and Italy.

Tourism industry sources also indicated a recovery of travel to Sinai. The first week of August saw 40,000 Israelis passing through the Taba crossing to the peninsula and onward to Egypt. Last year, 50,000 travelers passed through the crossing during the entire month.

Oren Amir, of the Sinai Peninsula Hotels company, said that his company had reservations for hotels close to the Israeli border, but no bookings for hotels south of the Taba Heights compound.

Ofer Heilig, of Nofar travel agents, also reported increased interest in proper hotels in Sinai, which appear to be replacing the traditional beach huts. "We've learned from experience, all of us - Egyptians and Israelis. There's an extremely high level of security in the hotels today. You can't even come close to any of them in private vehicles," he said. "Also, Israelis booked at hotels are taken by special shuttles to their destinations, accompanied by security guards."