Israeli forces fired artillery rounds across the Lebanese border on Monday after Shiite militia Hezbollah attacked an Israeli army patrol in a disputed frontier area.
Hezbollah said the bomb in the area of Shebaa Farms had destroyed an Israeli army vehicle and injured its occupants.
Shebaa Farms is located at the junction of Lebanon, Syria and Israel and has been occupied by Israel since the 1967 Middle East war.
An Israeli army spokeswoman said that as far as she knew there were no injuries, but the incident was still being investigated.
The Israeli military said it responded with "targeted artillery fire."
Lebanon's National News Agency said the outskirts of the southern town of al-Wazani and other areas came under heavy shelling.
According to Hezbollah, the bomb was planted by the Martyr Samir al-Quntar Group, named after a top militant killed in an Israeli airstrike in Syrian capital Damascus last month.
Al-Quntar was the longest-serving Lebanese prisoner in Israel before his release in a 2008 deal.
Hezbollah leader Hassan Nasrallah had vowed to avenge his killing "in the place and time and by the means we see necessary."
Hezbollah, which was formed in the early 1980s during the Lebanese civil war and is backed by Iran, has fought several wars with Israel.