Levanon, Israeli foreign ministry spokesman, told Al Jazeera that Nasrallah's speech was designed for "local consumption".
"I think this is a speech for local consumption for the simple reason that every time Hassan Nasrallah feels that he has some difficulty... in Lebanon he turns to Israel and starts with threats.
"We're facing a strange situation. We have Hezbollah with heavy armaments, weapons from Syria and Iran, and the state of Lebanon, the authorities, the government of Lebanon, says nothing."
Israel's 33-day war with Hezbollah in the summer of 2006 resulted in the deaths of more than 1,200 Lebanese civilians, a third of them children, as well as 160 Israelis, mostly soldiers.
The conflict destroyed much of the country's major infrastructure and targeted Hezbollah strongholds in southern Lebanon and the southern suburb of Beirut before ending with a UN-brokered ceasefire on August 14, 2006.
On Monday, Benjamin Netanyahu, the Israeli prime minister, warned that the Lebanese government would be held responsible for any new attacks against Israel coming from its territory if the group was included in the cabinet.
But Nasrallah said Netanyahu's warnings only amounted to "psychological warfare" and served to sow discord among Lebanese parties, hinder the formation of a cabinet and prevent Hezbollah from joining a new Lebanese government.
Seven weeks after the start of negotiations on a new Lebanese government, rival parties agreed on the number of ministers each political bloc will have but still disagree over who will get such key portfolios as foreign affairs, finance, interior and telecommunications.