Israel shelled southern Lebanon yesterday after a rocket slammed into its territory in a tit-for-tat exchange of fire across their tense border, sources on both sides said.

Israeli rescue services said three people were injured when the rocket struck near the town of Maalot in the western Galilee region, triggering an immediate response from Israel.

"The Israeli army considers this a serious incident and believes it is the responsibility of the Lebanese government and the army to prevent this rocket fire," an Israeli army spokesman said.

Lebanese Prime Minister Fuad Siniora denounced the violence, which caused panic on both sides of the border, while the militant Shiite Muslim group Hizbollah denied any involvement.

"The Israeli shelling is an unacceptable and unjustified violation of Lebanese sovereignty," Siniora said in a statement. "The rockets launched from Lebanon threaten the country's security and stability and constitute a violation of UN Security Council Resolution 1701."

He was referring to the resolution that brought an end to the devastating 2006 war between Hezbollah and Israel in Lebanon that left more than 1,200 people dead.

Lebanese President Michael Sleiman reiterated his opposition to the country being used as a platform for the launch of rockets, saying he regards it as a challenge to Lebanon's will.

A spokesman for Israel's Magen David Adom emergency rescue service said three people were lightly wounded and another two were treated for shock.

Hizbollah spokesman Ibrahim Mussawi told AFP that the group had "nothing to do" with the attack, which was launched from a region largely controlled by Hizbollah and its Amal party ally.