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The United States on Wednesday imposed sanctions on aÌýLebanese environmental organisationÌýaccused of being an arm of the militant group Hezbollah.

The Treasury Department's Office of Foreign Assets Control designated Green Without Borders and its leader, Zouher Nahli, for allegedly providing support and cover to Hezbollah in southern Lebanon along the "Blue Line" between Lebanon and Israel "while operating under the guise of environmental activism".

The announcement comes as tensions between Hezbollah and Israel flared along Lebanon's southern border for much of last month.

Hezbollah erected two tents in the occupied Shebaa Farms and Kfar Shuba Hills, which Israeli captured during the 1967 Mideast War and illegally annexed in 1981.

The Shebaa Farms and Kfar Shuba Hills are Arab territory occupied by Israel that belongs either to Lebanon or Syria. These areas claimed by Beirut and viewed with great importance by Hezbollah.

Meanwhile,ÌýIsrael's building of a wall around the Lebanese part of a villageÌýthat Israeli troops captured during the 2006 Israel-Hezbollah war worsened tensions.

In early July, IsraelÌýshelled a southern Lebanese border townÌýafter explosions were heard in an area that spans between Lebanon and Syria's Israeli-occupied Golan Heights.

The Treasury says Green Without Border’s outposts are manned by Hezbollah operatives, serving as cover for the militant group's warehouses and munitions tunnels.

Workers at the outposts have allegedly prevented United Nations peacekeepers in Lebanon from accessing areas that the agency has authority to access.

Green Without Border is a nongovernmental organisation established in 2013. It says it aims to protect Lebanon's green areas and plant trees.

"We are not an arm for anyone," NahliÌýtold The Associated Press in January.

"We as an environmental association work for all the people and we are not politicised."

He said the same after the AP contacted him about the Treasury's announcement.

However, Israel, the United States and some in Lebanon accuse the NGO of hiding Hezbollah's military activities by setting up outposts for the militant group along the border.

Israel accuses the organisation of gathering intelligence for Hezbollah through its outposts, which Nahli has denied.

UN's peacekeeping forces in Lebanon, known as UNIFIL, in November, said their patrols were prevented from nearing shipping containers and prefabricated buildings set up alongside the border, some with clear Green Without Borders markings.

Matthew Miller, a spokesman for the State Department, said the US took action "as part of our efforts to prevent and disrupt financial and other support for terrorist attacks in Lebanon, Israel, and around the world".

Brian E. Nelson, the Treasury's undersecretary for terrorism and financial intelligence, said the US rejects Hezbollah's "cynical efforts to cloak its destabilising terrorist activities with false environmentalism".

Israel and Hezbollah fought to a draw in a monthlong war in Lebanon in 2006.

Israel considers Hezbollah its most serious immediate threat, estimating it has some 150,000 rockets and missiles aimed at Israel.