The Israel Defense Forces (IDF) says it has launched an investigation after confirming it attacked a vehicle carrying Lebanese soldiers in southern Lebanon.
The Lebanese Army said Saturday's "aggressive and barbaric" strike had killed a brigadier-general, a captain and a private. The IDF said the vehicle was "moving suspiciously towards forces" and gunfire had been reported in the area.
Israel is not in direct conflict with the Lebanese government, which is involved in talks with Israel to secure a ceasefire.
But it has been fighting Hezbollah since March, primarily in southern Lebanon, from where the Iran-backed armed group has launched rocket and drone attacks into northern Israel.
On Saturday, the IDF said it struck around 150 Hezbollah "infrastructure sites" in southern Lebanon over the weekend, including what it said were weapon storage sites and command centres.
The strike against the Lebanese army vehicle happened on a road close to the village of Kfar Tebnit, around four miles north of the Litani River and close to the city of Nabatieh, where there has been intense fighting and displacement in recent months.
The IDF said the vehicle it struck was travelling in an "active and evacuated combat zone" where it believes Hezbollah has operated from.
A statement said troop movements in the area require coordination with the IDF, and repeated that its forces "are operating against the Hezbollah terrorist organisation, not against the Lebanese Army".
The Lebanese Army has reacted furiously to the attack, accusing Israel of "brutal, deliberate and repeated aggression".
It shared images of the burnt-out wreckage of a car on a road outside the village.
The victims have been identified as Brig Gen Samer Sabra, Cpt Elie Khoury, and Pte Hassan Ghazal.
News of the attack comes after Hezbollah's leadership rejected efforts to revive a US-backed ceasefire agreed between Israel and Lebanon following talks which did not involve the Iran-backed group.
That agreement stipulated Israel would not attack Hezbollah positions in the capital Beirut if the group did not attack Israel, as well as making provisions for "pilot" security zones inside southern Lebanon from which the group would be banned from operating.
Hezbollah's leader Naim Qassem rejected the deal, calling talks between Lebanon and Israel "futile".
Lebanon's government wants to end the fighting on its territory, which has previously involved major air strikes on its capital city.
It has said a ceasefire is necessary for its forces to disarm Hezbollah themselves, but Israel has previously accused the government in Beirut of lacking the ability to do so.
US President Donald Trump has sought to defuse the conflict in Lebanon in order to reach an agreement with Iran, which has made any deal to end its war with the US and Israel contingent on the campaign against Hezbollah being halted.
Lebanon was drawn into the war between the US, Israel and Iran on 2 March, when Hezbollah launched rockets into Israel in retaliation for an Israeli strike that killed Iran's supreme leader.
Israel responded with an air campaign across Lebanon and a ground invasion in the south.
An initial ceasefire was agreed on 16 April but it failed to stop the fighting.
Israeli strikes had largely been confined to southern Lebanon in recent weeks, though the IDF has attacked in the east of the country since Israeli Prime Minister Benjamin Netanyahu announced an intensification of the campaign on 26 May.
At least 3,550 people have been killed in Lebanon since the start of the war, according to the country's health ministry. Its figures do not distinguish between combatants and civilians.
Israel says 26 of its soldiers and four Israeli civilians have been killed on both sides of the border during the war.
In an interview with CNN, Lebanese President Joseph Aoun said the Lebanese people were "fed up" with the war between Israel and Hezbollah. He blamed Iran for the situation in his country - a remark that prompted Iran's foreign minister to say, "save Lebanon from your real foe, Mr. President" - an apparent reference to Israel.
