While a UN-brokered truce held, there was tension in the sky above Lebanon as 10 Israeli warplanes flew over the south, east and north of the country on Monday, according to Lebanon's army.

UN Secretary General Kofi Annan expressed concern at the clashes and called on all parties to exercise maximum restraint and respect the Blue Line, the border drawn by the UN after the withdrawal of Israeli forces from southern Lebanon in 2000.

While commending the Israeli and Lebanese governments for avoiding further escalation, Annan “particularly urges the government of Lebanon to make every effort to exercise its control over the use of force from its territory,” UN spokesman Stephane Dujarric said in New York on Monday.

On the ground in south Lebanon, residents cleaned up the damage caused by the Israeli air strikes and artillery shells that followed rocket attacks on the Jewish state.

In the Lebanese towns and villages of Marjayoun, Aytaroun, Aita Shaab and Khiam — all four to 10 kilometres north of the Israeli border — people swept up the broken glass and reopened their shops and schools. Village squares filled with market stalls and customers, and police went around surveying the damage.

Everybody hoped that the truce imposed Sunday evening would continue to be respected.

An Israeli general claimed Monday that his forces had destroyed most of the positions of Hizbollah men in southern Lebanon in Sunday's fighting in which two fighters were killed and six wounded. Two Israeli soldiers were wounded.

South Lebanese who saw Israel's air strikes and artillery bombardments said several Hizbollah posts were destroyed or heavily damaged. But they were largely observation posts manned by fighters with light arms, the witnesses said, speaking on condition of anonymity because of the security sensitivities.

Israel's retaliation on Sunday had wounded two Lebanese civilians, including a 14-year-old girl, and made many others leave the border area or take shelter in their basements. Residents of towns in northern Israel rushed into bomb shelters as Katyusha rockets landed nearby.

In the southeast Lebanese village of Sohmor, as many as 8,000 people turned out for the funeral of Youssef Mohammad Alaeddine, 36. Hizbollah supporters carried the coffin, wrapped in a Hizbollah flag, as women showered it with rice and rose petals, a traditional sign of greeting because the Shiite Muslim group considers those killed fighting Israel to be martyrs.

Addressing the crowd, a senior Hizbollah official, Sheikh Mohammad Yazbeck, pledged that the movement would continue to attack Israel and would never disarm, as the UN Security Council has demanded.

“We will keep our weapons as long as there is blood in our bodies. The resistance will continue,” he said.

It was not clear where the other fighter killed Sunday, a member of the Popular Front for the Liberation of Palestine-General Command, would be buried.

A spokesman for the UN Interim Force in Lebanon, Milos Strugar, told reporters in the Lebanese border town of Naqoura that Sunday's fighting was the heaviest exchange of fire since Israel withdrew its troops from Lebanon in May 2000.

Strugar said the UN force brokered the ceasefire.

The fighting started in the early hours of Sunday morning when rockets were fired into northern Israel. None of the groups operating in south Lebanon have claimed responsibility for the initial attack.

Many Lebanese had expected a flare-up after Friday's car bombing in the southern Lebanese city of Tyre that killed a senior official of the Palestinian group Islamic Jihad and his brother.

President Emile Lahoud blamed Israel for the fighting and urged the world to intercede “to put an end to Israel's aggressive actions.” But Israel denied involvement in the bombing and put the onus on Beirut to maintain the peace.

“We see the government of Lebanon, the sovereign government, as responsible for order and the need to preserve calm,” Israeli Defence Minister Amir Peretz said.

Israeli Prime Minister Ehud Olmert warned that if Lebanon did not stop rocket attacks, “they will receive a clear and harsh response with no hesitation.” The United States and the United Nations have been pressing Lebanon to implement a 2004 UN Security Council resolution that calls for the disarmament of all armed groups in Lebanon, including Hizbollah and radical Palestinian groups.

But the Lebanese government considers Hizbollah a legitimate resistance movement that is fighting Israeli occupation of Lebanese territory. (AP)