The Israeli air force has attacked Hezbollah targets in Lebanon overnight, in vengeance for a deadly missile strike on the Golan Heights which killed 12, authorities said.
Israel blamed Hezbollah for the strike and vowed to inflict a "heavy price" on the .
Hezbollah denied any responsibility for the attack, the deadliest in Israel or Israeli-occupied territory since the start of the conflict in Gaza.
The attack sharply escalated tensions in the hostilities which have been fought in parallel to the Gaza war and has raised fears of a full-blown conflict between the heavily armed adversaries.
Netanyahu warns of 'heavy price' after Golan Heights strike
The rocket struck a football pitch in the Druze village of Majdal Shams in the Israeli-occupied Golan Heights, territory captured from Syria by Israel in the 1967 Middle East war and .
"Hezbollah will pay a heavy price, the kind it has thus far not paid," Prime Minister Benjamin Netanyahu said in a phone call with the leader of the Druze community in Israel, according to a statement from his office.
In a written statement, Hezbollah said: "The Islamic Resistance has absolutely nothing to do with the incident, and categorically denies all false allegations in this regard".
Benjamin Netanyahu's office gave a bleak warning following the attack. Source: ABACA / Middle East Images/ABACA/PA
"They were playing soccer, they heard sirens they ran to shelter.. it may take them like 15 seconds (to reach the shelter). But they couldn't reach the shelter because the rocket hit the site between the ground and the shelter," said Mourhaf Abu Saleh, a witness.
Netanyahu, already due to head back from the United States to Israel overnight on Saturday, said he would bring his flight forward and convene his security cabinet upon arrival.
The United States, which has been leading across the Lebanese-Israeli border, condemned it as a horrific attack and said US support for Israel's security was "iron-clad and unwavering against all Iranian backed terrorist groups, including Lebanese Hezbollah".
Paramedics rushed to help children after the rocket attack hit a soccer field in Golan Heights. Source: AP / Hassan Shams/AP
Speaking with reporters at Majdal Shams, Israeli military spokesperson Rear Admiral Daniel Hagari said that forensics showed the rocket was an Iranian-made Falaq-1.
In a televised statement, Hagari also said that for now there was no change in Home Front Command instructions, indicating the army was not expecting imminent escalation across Israel.
The Israeli military said after Saturday's attack the death toll among civilians killed in Hezbollah attacks had risen to 23 since October, along with at least 17 soldiers.
The conflict has forced tens of thousands of people in both Lebanon and Israel to leave their homes. Israeli strikes have killed some 350 Hezbollah fighters in Lebanon and more than 100 civilians, including medics, children and journalists.
Hezbollah is the most powerful of a network of Iran-backed groups across the Middle East that have entered the fray in support of their Palestinian ally Hamas since October.