Israeli PM Benjamin Netanyahu warned on Thursday that Israel will "strike our enemies", after Israeli military commentators predicted an escalation could target Palestinian territories.
The Israeli army claimed prior to Netanyahu's statement that Palestinians were responsible for rockets fired into northern Israel's Western Galilee region from Lebanon on Thursday.
"We will strike our enemies and they will pay a price for all acts of aggression..." Netanyahu said, as he claimed Israel has "no interest in changing the status quo" of Jerusalem's al-Aqsa mosque compound.
The Israelis were left injured, according to Israeli medical services, in a possible retaliation over multiple attacks by the Israeli security forces on worshipers at the al-Aqsa Mosque during Ramadan.
"We know for sure it's Palestinian fire... it could be Hamas it could be Islamic Jihad, we are still trying to finalise but it wasn't Hezbollah," Lt. Colonel Richard Hecht told reporters.
However, Hezbollah, an Iran-backed Lebanese Shia militant group, denied involvement in the rocket attacks fired from Lebanon in an interview with Al-Araby Al-Jadeed.
Israeli media reports have not ruled out the possibility that the army may attack Palestinian territories, or direct attacks towards Hamas, Al-Araby Al-Jadeed reported.
Military commentator for newspaper Israel Hayom, Yoav Limor, also warned a "broad escalation" could be on the horizon, and that Gaza and the West Bank could be affected by a fierce Israeli response.
An unnamed source in the UN Interim Force in Lebanon (UNIFIL) told °®Âþµº that the rockets were fired by Palestinian groups as revenge for the Israeli raid of al-Aqsa Mosque in Jerusalem on Tuesday.
However, Israeli newspaper Yedioth Ahronoth stated that Israel have "limited" intelligence information on Palestinian factions operating in Lebanon, Al-Araby Al-Jadeed reported.
Israel will reportedly request mediators to persuade Hezbollah not to respond to the raids that it may carry out against targets belonging to the factions it holds responsible for the attack, according to Yedioth Ahronoth.
Shia militant group Hezbollah is the only Lebanese faction that kept its weapons after the end of the country's 1975-1990 civil war.
The salvo of 34 rockets fired on the Jewish holiday of Passover was the largest escalation along the frontier since Israel and Hezbollah fought a 34 day war in 2006.
Israeli police drew widespread condemnation and warnings of retaliation from around the region for storming the al-Aqsa mosque - Islam's third-holiest site - earlier in the week, and arresting over 400 Palestinians and worshippers.
Earlier on Thursday, Israel also bombed the besieged Gaza Strip, causing significant damage to the Nuseirat camp located in the centre of the enclave.
It followed rockets being fired from Gaza into southern parts of Israel - which were said to be retaliation for the raids on the Al-Aqsa compound.