The Israeli raid on a village near Baalbek on Saturday was the biggest challenge yet to the six-day-old ceasefire that ended a month of conflict.
Israel said the operation was aimed at blocking weapons shipments to Hezbollah militia from Iran and Syria.
The Lebanese government denounced the raid as "a flagrant ceasefire violation" and threatened to suspend the historic deployment of its troops to Hezbollah's longtime bastion in the south if Israel continued to breach the truce.
The Israeli army said one officer was killed and two others wounded in the dawn raid.
Israeli helicopters landed two Hummer vehicles in the mountainous region of Afqa as Israeli jets carried out mock raids as cover, the Lebanese military said.
Israeli commandos then drove eastward to the village of Buday where they clashed with Hezbollah militants for about an hour before two helicopters retrieved them.
There were exchanges of fire earlier this week that left at least four Hezbollah fighters dead, but both sides downplayed the clashes.