"In my estimation, understanding and knowledge it is almost clear to me that it is a matter of time before there is a military clash in the north," Peled said on Israeli military radio.
"We are heading toward a new confrontation," Peled said.
"But I don't know when it will happen, just as we did not know when the second Lebanon war would erupt."
Peled was referring to the devastating war Israel fought with Hezbollah in 2006, which killed more than 1,200 Lebanese, most of them civilians, and more than 160 Israelis, mostly soldiers.
Hezbollah is part of Lebanon's new coalition government, formed by Saad Hariri, the US- and Saudi-backed Lebanese prime minister.
"Although Hezbollah is part of the Lebanese government, the latter has no influence on it," Peled said, adding the Jewish state will hold Hezbollah and its ally Syria responsible for any attack on Israel.
"Unlike many others [officials] I consider that peace is not a goal in itself but only a means to guarantee our existence," Peled said.
Last week, Ehud Barak, Israel's defence minister, warned Lebanon and Hezbollah against any attempt to undermine the "calm" prevailing at the border between the two countries.