They said the 107 mm Katyusha rocket, with a range of 9 km (5.5 miles), struck a factory in the border town of Shlomi as residents celebrated Israel's Independence Day.

A Hizbollah spokesman in Beirut had no comment on the report and there was no immediate claim of responsibility.

In recent years Palestinian guerrillas have launched rockets across the border from southern Lebanon. The last rocket attack, in November, prompted Israeli threats of retaliation.

Hizbollah guerrillas, whose attacks hastened the end of the 22-year Israeli occupation of southern Lebanon in 2000, have also on occasion traded fire with the Jewish state's forces along the frontier. (Agencies)