Israel has threatened to use force to remove a military position set up by Lebanese group Hezbollah over the Blue Line between the two countries.
"The matter is known and being dealt with together with the relevant authorities," the Israeli army said in a statement.
According to Israeli public broadcaster KAN, Hezbollah set up two tents, each of which is manned by three to eight Hezbollah members, in the Shebaa Farms near the border two weeks ago.
The Israeli army said it seeks to deal with the issue through diplomatic means and have a UN peacekeeping force remove the Hezbollah position, but threatened that it may use force eventually.
According to Israeli Army Radio, Hezbollah said that the position was set up on a Lebanese land occupied by Israel.
Strategically located on the Syrian and Israeli borders in southeastern Lebanon, Shebaa Farms include a total of 13 farms. Of these, 12 farms spread over an area of some 25 square kilometers under Israeli occupation, with only one remaining within Lebanon's borders.
The Blue Line was set by the United Nations between Lebanon and Israel following the withdrawal of Israeli forces from the country in 2000.
Hezbollah fought several wars with Israel, the latest of which was in 2006 during which the Lebanese group struck major Israeli cities with rockets, causing significant material damage.
Over 1,000 Lebanese were killed in the conflict, while much of southern Lebanon-a Hezbollah stronghold-was devastated by Israeli attacks.