"Any Israeli incursion will not have any political gains as long as it does not achieve any of the declared objectives, most importantly a halt to the continued bombardment of the Zionist settlements in occupied northern Palestine," Mr Nasrallah told As-Safir newspaper.
"And I assure you that this objective will not be achieved, God willing, through any Israeli incursion," he said.
Asked about diplomatic proposals to end the hostilities, Mr Nasrallah said: "We are truly in a state of war and Hezbollah's priority is to stop the savage Zionist aggression on Lebanon.
"We do not feel that we are currently interested in discussing ideas or initiatives," he said.
"The priority now is to stop the Israeli aggression, and when things reach the phase of serious discussions over ideas and initiatives we will be ready to propose our ideas."
Israel launched an offensive on Lebanon after Hezbollah captured two Israeli soldiers in a border raid on July 12 and said it would only free them in exchange for the release of Arab prisoners.
Since then, Israeli forces have staged massive and destructive raids across Lebanon and carried out several limited incursions across the border.
Yesterday, Lebanese Foreign Minister Fawzi Sallukh, who is close to Hezbollah, said the two captured soldiers were "in good health" and called on the United Nations or "any third friendly party" to engage in discussions for a prisoner exchange.
But Mr Nasrallah said he had not authorised anyone to speak about the condition of the prisoners, and that any information would only be given in negotiations on an exchange of prisoners.
"The German channel is still acceptable, and we have no objection on other channels because this issue requires the acceptance of both parties," he said, referring to at least three previous German-brokered prisoner swaps.
Lebanon's parliamentary speaker Nabih Berri, a Hezbollah ally, said yesterday that Hezbollah has agreed to the Lebanese government dealing through a third party with Israel on an exchange.
"We reiterate that we have no objection that the Lebanese government be responsible to negotiate," Mr Nasrallah said.
Yesterday, Israel repeated its demand that Hezbollah release the two Israeli soldiers without any conditions.
Troops move deeper into Lebanon
Israeli troops were locked in fierce battles with Hezbollah guerrillas as they advanced deeper into Lebanon today, heading towards a small town after taking control of a village at the weekend.
Israeli troops and tanks rolled past the village of Marun al-Ras, seized in an operation on Saturday, moving on a three-kilometre road leading to the town of Bint Jbeil.
Israel said five soldiers were wounded in the fighting.
Local television showed live footage of black smoke billowing into the sky over the area, as Israeli tanks, armored personnel carriers and bulldozers rumbled through the countryside.
Later, al-Jazeera reported that an Israeli soldier had been killed during fighting
with Hezbollah militants in south Lebanon.
The soldier was killed and others were wounded in clashes near the village of Marun al-Ras, which was seized by Israeli troops at the weekend, it said.