His speech was broadcast live by Hezbollah's Al-Manar television on a giant screen in the Hezbollah stronghold of southern Beirut.
Nasrallah said they were intended to send "a clear message" to Israel that his fighters were ready to defend Lebanon.
"I hope the Lebanese will be united and will not make Lebanon, their homeland, another battleground"
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"The [Israeli] enemy has been conducting military manoeuvres for months".
He said 50,000 Israeli officers and soldiers participated in the drill.
"These manoeuvres are to prepare for an attack on Lebanon" he said.
A senior Hezbollah official confirmed that thousands of unarmed fighters of the group took part in the organisation's own manoeuvres after reports were published in the pro-Hezbollah newspaper Al-Akhbar.
No other details were given.
Fouad Siniora, the Lebanese prime minister, played down the reports, saying the exercises took place on paper only.
"What happened is nothing but an internal simulation exercise that was never translated on the ground," he said.
Al-Akhbar said Nasrallah personally supervised the exercise, which were carried out without weapons or uniforms during the last three days.
"I tell the [Israeli] enemy that these manoeuvres were real, serious and big. I am not going to give details," Nasrallah said as part of Sunday's speech.
"There is a great deal of readiness [by Hezbollah] which the enemy must understand."
He received cheers from the crowd after saying that "the resistance in Lebanon possesses determination, men and the necessary and sufficient weapons to defend Lebanon".