JERUSALEM   - Israel has intensified controversial military flights over the Lebanon border but stressed it wanted no escalation after Israeli and Lebanese soldiers traded fire for the first time in decades.

"We are going to continue our flights and even bolster our aerial activities our Lebanon," General Alon Friedman told public radio hours after the exchange on the volatile Israeli-Lebanese border.

Israeli aircraft flew over the border zone Thursday, in operations that the United Nations has previously warned undermine the "credibility" of its peacekeepers and Lebanese soldiers, and "compromise" stabilizing efforts.

Defence Minister Amir Peretz, under massive pressure to resign over the war in Lebanon that ended six months ago, vowed after talks with the top brass that Israel would not turn a blind eye to future border infractions.

"We do not intend to pursue the policy of turning a blind eye, as in the past," his office said in a statement after the meeting.

"Israeli forces acted in keeping with normal procedure. We have no intention of provoking a deterioration or an escalation, but where fire endangers our force, we have to react," Peretz's office said Thursday.

Lebanese Prime Minister Fuad Siniora also ordered his army to respond to any new violation of Lebanese sovereignty.

"Siniora was in contact with the army command... and gave clear orders for the confrontation of any Israeli violation of Lebanese sovereignty," the Lebanese National News Agency reported.

Siniora met Gier Pedersen, the UN representative in Lebanon, over the exchange of shots, which the agency called "a violation of the Blue Line," the line drawn by the United Nations delineating the Lebanese-Israeli border.

"It is a new violation in addition to the Israeli air violations of Lebanese sovereignty which never stopped after the ceasefire declared last August."

Wednesday's exchange of fire came after Israeli sappers moved in to clear unexploded ordnance which Israel, however, insisted were on its territory.

It was the first shooting incident at the Israeli-Lebanese border since Israeli troops left Lebanon in October after the war with Hezbollah that killed more than 1,200 people in Lebanon and at least 160 Israelis.

It was also the first border incident involving the Lebanese and Israeli armies for around three decades, after Lebanese forces redeployed to the border area after the August ceasefire for the first time in years.

An AFP correspondent on Thursday saw Israeli aircraft flying over the Lebanese area of Maroun Ar-Ras and Yaroun, with Israeli helicopters hovering over the Israeli side of the border, facing the two villages.

The Israeli air force routinely flies over Lebanon on the premise of monitoring alleged Hezbollah arms smuggling into the country from Syria.

National Infrastructure Minister Benjamin Ben-Eliezer said Israel should prepare for a second round of conflict in 2007 with Hezbollah.

"I'm one of those who thinks that even if we don't want to, between now and the end of the year we will enter a new conflict and it's better to be prepared," he told public radio.

Asked if Israel should prepare for a conflict involving not only Hezbollah but Syria, Ben-Eliezer said only that the country should learn from mistakes made during the summer and "rapidly prepare the army" for war.

But cabinet ministers and army officials stressed they have no intention of provoking an escalation on the border.

Public Security Minister Avi Dichter told army radio that he believed no one had any interest in a new armed escalation.

"I don't think there will be an escalation because it is not in the interests of either side," he said.

"We expect the calm to return but we are prepared for all scenarios," General Friedman told public radio. -AFP