In the worst single-incident of civilian losses for Israel since Hamas stormed into its southern villages and army bases on October 7, a rocket exploded in Golan Heights on Saturday, killing 12.
The rocket strike hit a football pitch and killed children who local authorities said were aged 10 to 16.
While Israel claims Hezbollah fired a Falaq-1 Iranian rocket at them, the Iran-backed group said it had "no connection" to the incident. The rocket strike has raised fears of a wider conflict between Israel and Hezbollah.
Israel's Prime Minister Benjamin Netanyahu has vowed to exact a "heavy price" from Hezbollah. He has held several meeting with his security cabinet and military chiefs to decide on the next course of action.
The US has condemned the rocket attack and called for restraint from all parties.
But Iran issued a warning saying that any new military "adventures" by Israel in Lebanon could lead to "unforeseen consequences".
Israel says it can't compromise with enemies sworn to its destruction and blacklisted as terrorists in the West. But domestic pressure for a hostage recovery is growing, and the IDF, which leans on conscripts and reservists, is fatigued.
Reports state that some senior officials within Israel are in favour of a ceasefire within Gaza, after which Hezbollah has assured to not attack Israel.
Israel launched its war against Hamas after the October 7 attacks in which 1,200 people in southern Israel were killed and 250 taken hostage to Gaza. The Hamas-run health ministry in Gaza says the death toll in Gaza has exceeded 39,000.
Hezbollah is far stronger than Hamas was before October 7, with more fighters, missiles and drones. A war would probably be devastating for both Lebanon and Israel, officials from both countries have said.