Israel has warned the Lebanese armed group Hezbollah it will pay the "price" for killing two Israeli soldiers, as it fired shells across the border into southern Lebanon, in one of the most serious clashes between the bitter enemies in recent years.

Israeli Prime Minister Benjamin Netanyahu made the threat after two soldiers were killed by a Hezbollah missile targeting their military convoy in the disputed Shebaa farms on the border with Syria and Lebanon.

 A return to Israel-Hezbollah hostilities?

"Those behind the attack today will pay the full price," Netanyahu said.

The Israeli military said seven soldiers were also injured in Wednesday's strike. None were reported to have suffered life-threatening injuries.

A Hezbollah statement claimed responsibility for the attack.

"The al-Quneitra Martyr's group targeted an Israeli convoy with specialised heavy duty rockets in the occupied Lebanese Shebaa farms area.The convoy included Israeli artillery, an officer and several soldiers many of whom were injured," the statement read. 

Israeli army spokesman, Lieutenant Colonel Peter Lerner, said Wednesday's attack was the "most severe" Israel had faced since 2006, when it fought a month-long war with Hezbollah that killed more than 1,200 people in Lebanon, mostly civilians, and some 160 Israelis, mostly soldiers.

In response, the Israeli military fired shells across the border into southern Lebanon killing a UN peacekeeper from Spain. 

Spain's ambassador to the UN blamed Israel for the death of 36-year-old Cpl. Francisco Javier Soria Toledo.

"It was because of this escalation of violence, and it came from the Israeli side," Roman Oyarzun Marchesi, Spain's Ambassador said.

Al Jazeera's Nisreen el-Shamayleh, reporting from Jerusalem, said while a response was expected from Israel against Hezbollah, an escalation of hostilities was unlikely.

Hezbollah, which has an arsenal of tens of thousands of missiles and rockets, is currently preoccupied with the war in neighboring Syria,where it is aiding President Bashar al-Assad's forces,

Building tensions

Tension in the area has been building, after an Israeli air strike in Quneitra on January 18 killed six Hezbollah fighters and an Iranian general.

Both Hezbollah and the Iranian army had vowed revenge, and earlier on Wednesday Iran said Israel should "await retaliation" for the strike.  

Israel occupied parts of Lebanon for 22 years until 2000 and the two countries are still technically at war.

Source: Al Jazeera and agencies