One of the children, Abbas Youssef Abbas, 5, was in a critical condition, the official Lebanese national news agency reported late on Saturday. The children were said to be playing with the unexploded ordnance.
The United Nations has confirmed 288 Israeli cluster bomb strike sites, including villages, across the south and says bomblets have killed 12 people since the August 14 truce that halted a 34-day war between Israel and Lebanon's Hezbollah group.
The bomblets that failed to explode are now a deadly trap for civilians who stayed in the south or who fled and are now returning.
Tekimiti Gilbert, operations chief of the UN Mine Action Coordination Centre in Lebanon, said last week: "It's a huge problem. There are obvious dangers with children, people, cars. People are tripping over these things."
Gilbert said he had no doubt that Israel had deliberately hit built-up areas with cluster bombs, in violation of international law which states that such munitions must not be used in areas where there are civilians.
"These cluster bombs were dropped in the middle of villages," he said.
Israel denies using the weapons illegally and accuses Hezbollah of firing rockets into Israel from civilian areas.
Gilbert said six assessment teams had been finding 30 new cluster bomb sites a day, mostly south of the Litani river, about 20km from the border with Israel.
"It's a huge problem. There are obvious dangers with children, people, cars. People are tripping over these things"
UN Mine Action Coordination Centre, Lebanon
Large numbers had also been found further north, around Nabatiya and Hasbaya.
Gilbert said it could take up to 12 months or more to rid the south of the Israeli bomblets, some of which are designed to knock out tanks, others to kill or maim people over a wide area.
Some are small, black and cylindrical, easy to overlook and to detonate. Others are round and can look like dusty rocks.
Comparing the use of cluster bombs in other conflicts, Gilbert said that Iraq and Afghanistan were huge countries, so most bomblets had fallen in deserts or unoccupied areas.
"But Lebanon is small and the south is even smaller. To have these cluster bombs dropped in such a small, confined space and in the numbers they have been used is lethal."