MISGAV AM, Israel, Aug 4 (Douglas Hamilton/Reuters) - A UN force said on Wednesday Israeli soldiers had been operating inside Israel at the onset of deadly border clashes with Lebanese troops that have raised fears of wider conflict.

A day after a senior Israeli officer, two Lebanese soldiers and a Lebanese journalist were killed in a rare skirmish between the Israeli and Lebanese armies, Israel appeared keen to show it would not be deterred from operating in the area.

The Israeli army moved a crane back into the now-quiet but still tense frontier zone with Lebanon to complete the tree-pruning mission that had drawn Lebanese fire and led to the most serious violence along the frontier since a 2006 war.

Israeli Defense Minister Ehud Barak repeated an Israeli warning to Lebanon that it would have to respond if its troops came under attack again.

The head of Lebanon's Hezbollah group, which stayed out of Tuesday's fighting, said it would act if Israel attacked the Lebanese Army.

In a diplomatic boost for Israel, the U.N. peacekeeping force in southern Lebanon (UNIFIL) said Israeli soldiers were inside Israeli territory when the border clashes erupted.

UNIFIL established ... that the trees being cut by the Israeli army are located south of the Blue Line on the Israeli side, said a statement quoting UNIFIL military spokesman Lieutenant-Colonel Naresh Bhatt.

He was referring to a border line drawn by the United Nations between Israel and Lebanon after an Israeli military withdrawal from southern Lebanon in 2000.

The United States and the United Nations urged both sides to show restraint.

Tuesday's violence began after an Israeli mechanical arm reached over a frontier fence to trim a tree whose branches, Israel's military said, were tripping anti-infiltration devices.

Israel said its soldiers were operating within Israeli territory and the tree was south of the so-called Blue Line. Lebanon said the tree was inside its territory.

Lebanese troops deployed at a distance on Wednesday from the site where an Israeli crane again tore into trees and the UNIFIL patrolled the adjacent Lebanese border village of Adaisseh.

Mark Regev, a spokesman for Israeli Prime Minister Benjamin Netanyahu, said UNIFIL's findings corresponded with Israel's position that the Lebanese attack on our forces was both unprovoked and unjustified.


SECURITY CABINET

Sayyed Hassan Nasrallah, leader of Iranian- and Syrian-backed Hezbollah, said he did not think Tuesday's clashes would lead to a bigger conflict, but there are reasons for worry.

In Jerusalem, Netanyahu convened his security cabinet as Israel and Lebanon prepared to bury their dead. He said after the clash Israel would respond aggressively to any future attempt to disrupt the calm along the northern border.

Tuesday's deaths were the first on either side since the 2006 war in which 1,200 people, mostly civilians, were killed in Lebanon, along with 158 Israelis, mostly soldiers.

A new war could be more devastating than the last. Tension has increased since April, when Israel accused Syria of transferring long-range Scud missiles to Hezbollah in southern Lebanon -- an allegation Syria has rejected.

Israel has threatened to attack Lebanese infrastructure in any new conflict. In 2006 it bombed bridges, fuel tanks, radar stations and Beirut airport, while Hezbollah fired 4,000 rockets into Israel.

In the Gaza Strip, where there has been an upsurge of violence over the past week, Israeli fire killed a Palestinian militant and wounded another. The Israeli military said aircraft had fired at Palestinians who approached the Gaza border fence. (Writing by Jeffrey Heller, Additional reporting by Yara Bayoumy in Beirut, Karamallah Daher in Adaisseh and Dan Williams in Jerusalem, Editing by Elizabeth Fullerton)