UNITED NATIONS, July 6 (Megan Davies/Reuters) - Israel used force not commensurate to the threat when it fired live ammunition during a Palestinian demonstration in May, but the protesters also behaved in a provocative and violent way, a U.N. report released on Wednesday said.

The Israeli army fired on a demonstration at a Lebanese border village on May 15, security sources and the Lebanese army told Reuters at the time.

Seven people died according to the U.N. report, a figure that was revised down from eleven initially reported killed. The incident happened by the Blue Line -- the U.N.-mapped frontier between Lebanon and Israel.

The report came from U.N. Secretary General Ban Ki-moon's office and is based on an investigation carried out by UNIFIL, the United Nation's force in Lebanon.

The Secretary General stands by his conclusions and observations, Ban's spokeswoman told journalists on Wednesday.

The demonstrators, in throwing stones and petrol bombs across the Israeli technical fence and the Blue Line ... carried out a provocative and violent act that constitutes a violation of resolution 1701, UNIFIL's preliminary findings found.

However, the firing of live ammunition by the Israel Defense Forces across the Blue Line against the demonstrators also constituted a violation of resolution 1701 and was not commensurate to the threat to Israeli soldiers.

The U.N. Security Council's Resolution 1701, adopted in August 2006, called for a full cessation of hostilities in the month-long war between Israel and Hezbollah.

Lebanese militant group Hezbollah and Israel fought a 34-day war in 2006, in which 1,200 people in Lebanon, mostly civilians, were killed, and 158 Israelis, mostly soldiers, also
died.

The U.N. report calls on Lebanese Armed Forces and Lebanese authorities to enforce law and order in the area and to prevent any incident on the Blue Line.

It also calls on Israel to refrain from responding with live fire in such situations, except where clearly required in immediate self-defense.

Palestinians mourn the creation of the state of Israel on May 15 each year, mostly in West Bank and Gaza. This year, inspired by popular uprisings across the Arab world, they also organized demonstrations in Syria, Jordan, Lebanon and Egypt along frontiers with Israel.

There are about 427,000 registered Palestinian refugees in 12 refugee camps across Lebanon, according to the United Nations.

The U.N. report, dated July 1, was an advance copy which will be issued as a Security Council document according to its cover.

(Editing by Jackie Frank)