Israeli forces exchanged fire with the Lebanese Shiite group Hezbollah in southern Lebanon on Wednesday, an Israeli army spokesman said.

But the spokesman did not confirm reports which said that two Israeli soldiers were wounded in the fierce confrontation in Avivim area in southern Lebanon.

Earlier in the day, a small number of Israeli ground troops crossed into southern Lebanon to carry out "pinpoint" attacks on Hezbollah outposts.

Israeli troops have entered southern Lebanon several times in recent days to mount attacks on Hezbollah posts, but returned soon afterwards.

The army has not ruled out the possibility of a major ground offensive at some stage.

Israel has intensified its massive military operation in Lebanon, bombing targets across the country, while Hezbollah guerillas have continued firing rockets onto northern Israel.

The violence erupted on July 12 when Hezbollah kidnapped two Israeli soldiers and killed eight during a cross-border attack.