The United States on Wednesday condemned Hizbullah's deadly operation in the Israeli-occupied Shebaa Farms as an "act of violence," urging all parties to refrain from actions that could escalate the situation, as France requested an urgent meeting of the U.N. Security Council.

U.S. State Department spokesperson Jen Psaki said that Washington did not want "an escalation of the situation."

The Mustaqbal parliamentary bloc stressed on Wednesday that the government alone is responsible for issues of war and peace, adding that the Shebaa operation earlier during the day should remind all Lebanese factions of the importance of preserving stability and security.

It said in a statement after its weekly meeting: “No side has the right to usurp the will of the Lebanese people and replace the constitutional authority of the state that is tasked with making national decisions.”

Palestinian resistance movements Hamas and the Islamic Jihad have lauded the attack carried out by Hizbullah in the Shebaa Farms on Wednesday, describing it as a “heroic” operation against the Israeli army.

“Targeting the enemy in Shebaa is the legitimate right of the resistance in the face of the occupation's arrogance and hostility,” Hamas said in a statement issued shortly after the assault.

Prime Minister Tammam Salam condemned Wednesday Israel's military escalation in south Lebanon, as the Foreign Ministry noted that a deadly Hizbullah attack on Israeli troops in the occupied Shebaa Farms did not violate the Blue Line that was demarcated by the U.N. following the 2006 war.

In a statement, Salam stated that “the Israeli escalation on the border with Lebanon after the Shebaa operation might pave the way for dangerous possibilities that do not serve peace and stability in the region.”

A U.N. peacekeeper from Spain was killed on Wednesday when the Israeli military shelled border areas following a Hizbullah attack that left two Israeli soldiers dead.

A 36-year-old corporal "died this morning during incidents between Hizbullah and the Israeli army in the area of responsibility of the Spanish contingent", the Spanish defense ministry said in a statement.

Arab League chief Nabil al-Arabi urged on Wednesday the United Nations Security Council to intervene to halt the “deterioration of the situation on the Israeli border with Syria and Lebanon” in the wake of the Shebaa Farms operation earlier in the day.

He said: “The Security Council should assume its responsibilities and intervene immediately to put an end to the Israeli assaults.”

Lebanese Forces leader Samir Geagea and Progressive Socialist Party chief MP Walid Jumblat were quick to react on Wednesday to Hizbullah's attack against an Israeli military vehicle in the Shebaa Farms, warning that Lebanon is headed towards a “turbulent” period.

The Foreign Ministry meanwhile condemned Israel's shelling of Lebanese territory.

Dozens of protesters Wednesday tried to storm the Gaza headquarters of the United Nations, an AFP correspondent said, after the U.N. announced it lacked funds to rebuild the war-battered Palestinian territory.

Around 200 people demonstrated outside the U.N. compound in Gaza City, burning tyres and throwing stones.

Two Israeli soldiers were killed and seven wounded on Wednesday in a Hizbullah attack on a military convoy in the occupied Shebaa Farms.

The Israeli army announced that two of its troops were killed, while a spokesman said seven Israeli soldiers were “lightly-to-moderately wounded” in the attack.

An Israeli rights group Wednesday criticized the government for what it called a deliberate policy of launching air strikes on homes that killed hundreds of civilians during last year's Gaza war.

In a report examining 70 raids on residential buildings in the besieged Palestinian territory, B'Tselem said Israeli officials were responsible for civilian casualties during the 50-day conflict that killed nearly 2,200 Palestinians.