JERUSALEM - Israeli Defence Minister Ehud Barak on Sunday called the situation in Lebanon "a serious development" following a series of deadly clashes between government forces and Hezbollah militants, backed by Israel's arch-foe Iran.

"Hezbollah's taking of control (in west Beirut) is a serious development," Barak said during the weekly cabinet meeting, public radio reported.

Barak's view was shared by other Israeli ministers who raised doubts about the ability of the Lebanese government and army to control Hezbollah, which seized west Beirut on Friday after three days of deadly battles.

Gunmen from Hezbollah and its opposition allies only withdrew after the army on Saturday revoked government decisions taken against the Shiite movement.

However, fighting erupted Sunday in mainly Druze areas southeast of Beirut, pitting supporters of the Western-backed government against rivals from the Hezbollah-led opposition.

Israeli military intelligence chief General Amos Yadlin told the cabinet that "the moderate camp has suffered another blow in Beirut" against "Hezbollah which has shown its military strength," a senior official said.

The government is also concerned that unrest in Lebanon will boost Iran's influence with Hezbollah and the Palestinian Islamist movement Hamas.

"The most dangerous possibility for us is to see Iran's proxies take control of the Gaza Strip and Lebanon because the fates of both regions are connected," Deputy Defence Minister Matan Vilnai told Israeli public radio.

Israel has long accused Iran of backing Hezbollah -- with which it went to war in 2006 -- and Hamas which seized power in Gaza nearly a year ago and launches near-daily rocket attacks on southern Israel.

"(Egyptian) President Hosni Mubarak recently declared that Egypt already has a border with Iran with the Gaza Strip. For us it's even worse because it's not only the Gaza Strip but also Lebanon in the north," Vilnai said.

Vilnai added that Israel did not intend to intervene in the crisis but had to "keep its eyes open."

Israel has long considered Iran its greatest strategic threat, both because of its accelerating nuclear programme -- which Tehran insists is peaceful -- and its president's repeated predictions of the demise of the Jewish state.

"Hezbollah put down the government of Lebanon," Israel's Interior Minister Meir Sheetrit told reporters ahead of the weekly cabinet meeting.

"It's a very dangerous step in the long run because it is clear that Hezbollah is Iran's long arm. I hope Lebanon's government and army will come to their senses or we will face the reality where Iran rules Lebanon," he said.

Israel invaded Lebanon in July 2006 after Hezbollah militants captured two Israeli soldiers in a deadly cross-border raid and battled the militia to a 34-day stalemate in which 1,200 Lebanese, mostly civilians, were killed.

A security official in Lebanon said "more than four" Israeli warplanes overflew southern Lebanon on Sunday in violation of the country's airspace.

Israeli jets regularly overfly Lebanon in violation of UN Security Council Resolution 1701 which brought an end to the 2006 war. -AFP