Hezbollah fired dozens of rockets into the northern Israeli town of Beit Hillel this morning.
Israel's Iron Dome missile defense system went into action and the military claimed to have intercepted most of them.
The Israeli air force responded by striking Hezbollah military targets in southern Lebanon. Lebanese media reports of an Israeli airstrike on a power plant at a water supply site in the southern Lebanese city of Taybeh.
According to world media, the US and Israel are expecting an attack from Iran on Monday.
"We will respond and demand a very high price for any act of aggression against us, from any arena," Prime Minister Benjamin Netanyahu said at the opening of the government meeting.
Meanwhile, the US has urged its citizens to leave Lebanon as soon as possible, as fears of a bloody war in the Middle East are growing.
The US embassy said on Saturday that those who choose to stay in Lebanon should prepare emergency plans and be prepared to take shelter in a safe place for an extended period of time.
She also added that most airlines have suspended flights and many tickets have been sold, but commercial transport options to leave Lebanon remain available.
Meanwhile, other countries such as the United Kingdom, Canada, France and Jordan have made the same call for their citizens to be in Lebanon.
The UK said it was sending extra military personnel, consular staff and border force officials to help with any evacuation of citizens. Two British warships are already in the region and the Royal Air Force has put transport helicopters on standby.
Tensions between Israel and Iran first escalated with the killing of 12 children and teenagers in an attack in the Israeli-occupied Golan Heights.
A few days later, Hezbollah's top commander, Fuad Shukr, was killed in an Israeli airstrike in Beirut, killing four others, including two children.
But just hours after that, the head of Hamas, Ismail Haniyeh, was killed in Iran on his way to attend the inauguration of Iran's new president, Masoud Pezeshkian.
Iran's Supreme Leader, Ayatollah Ali Khamenei, has said that Israel will suffer severe damage for this murder. This also raises fears that retaliation could turn into a war front in the Middle East.