"If (a war) were to happen as they are threatening, our victory this time will be decisive, unquestionable and final," Nasrallah said in a televised address marking the 20th anniversary of the founding of the Hezbollah-sponsored "Al-Mahdi Scouts."

A number of Israeli leaders have issued warnings to Lebanon in recent days after the formation of a national unity government in which the Hezbollah-led opposition has 11 ministries and the power of veto over cabinet decisions.

"The moment the Lebanese government confers legitimacy on Hezbollah, it must understand that the entire Lebanese state will be a target in the same way that all of Israel is a target for Hezbollah," Environment Minister Gideon Ezra said on Wednesday.

Prime Minister Ehud Olmert made similar remarks the previous day, warning that Israel would fight a far more devastating campaign than in the 2006 war if Hezbollah led the government.

Nasrallah branded these statements as "scare tactics" and "psychological warfare" on the Lebanese, saying they were "an internal necessity in Israel.

"There are currently elections within Kadima (Israel's ruling political party) and each candidate is trying to portray himself as the leader and the saviour" of Israel, he said.

Nasrallah said Israeli Defence Minister Ehud Barak had threatened to wage a land operation with five Israeli military units.

"The five units will be destroyed in our mountains and valleys and homes and villages," Nasrallah said.

"And with it will be destroyed your country that is violating our sacred land."

Israel and Hezbollah fought a devastating 34-day war in the summer of 2006 which left over 1,200 Lebanese dead, mostly civilians and more than 160 Israelis, mostly soldiers killed.

The Israeli bombardment of Lebanon at the time centered mostly on Hezbollah strongholds in southern Lebanon and the southern suburb of Beirut, but the military did hit civilian infrastructure, including the main international airport, roads, bridges and a power station.

Israel has always said that such instances were exceptions to an attack that was solely focused on Hezbollah and was initially aimed only at recovering two Israeli soldiers seized in a deadly cross-border raid on July 12, 2006 which sparked the conflict. -AFP