President Mahmoud Ahmadinejad on Wednesday warned Iran's arch foes Israel, the United States and some European nations to stop their "sedition" in Lebanon or the Lebanese people would "chop" their hands.

"You are on a rough downhill path that will take you into a deep valley and your actions show that your decline is on a fast track," Ahmadinejad, referring to the U.S., Israel and unspecified European nations, told a cheering crowd in the city of Yazd in a speech broadcast live on state television.

A rocket fired by militants in Gaza landed in southern Israel early on Monday, in the first incidence of firing since armed Palestinian groups there agreed to observe a truce last week.

The projectile, a home-built Qassam rocket, caused no injuries or damage when it landed in the Shaar HaNegev regional council which flanks Gaza's northeastern border.

Israeli Defense Minister Ehud Barak abruptly announced Monday that he was leaving his Labor Party and forming a new parliamentary faction inside the governing coalition, completing a split in the iconic party over the handling of peace talks with the Palestinians.

The dramatic and unexpected move did not immediately threaten the stability of Prime Minister Benjamin Netanyahu's parliamentary majority. Instead, it appeared to strengthen Netanyahu's hardline coalition by leaving it with a smaller, yet largely like-minded majority.

The bodies of two Palestinians shot dead overnight in northern Gaza by Israeli troops were recovered Thursday by Palestinian medical officials.

Adham Abu Selmiya, the spokesman for the Hamas-run health services in the Gaza Strip, said an ambulance found the bodies of the two men on Thursday morning.

The Israeli army leadership accused Iran and Hizbullah of continuing to consolidate Hamas' military capabilities by transferring advanced weapons to the Islamist movement.

The army leadership said it decided to change the rules of the game following increased rocket attacks from the Gaza Strip on Israel.

Israeli army chief of staff Lieutenant-General Gabi Ashkenazi has unveiled that an anti-tank missile used by Hizbullah during the 2006 war penetrated a tank's outer shell earlier this month.

Ashkenazi told the Knesset's Foreign Affairs and Defense Committee on Tuesday that the Kornet missile fired in the Gaza Strip penetrated the tank's outer shell but failed to explode inside. There were no injuries in the incident.

A senior Israeli officer warned Hizbullah that Israel's response this time would be much tougher.

"The response would be ten times tougher than the July war if tensions spread to the northern border," the officer warned.

House Speaker Nabih Berri hoped on Monday that the United Nations Security Council would devise a resolution that would ban the use of cluster bombs, adding that the decision should be binding to all nations, starting with Israel.

He said after holding talks with an international delegation that Israel dropped more than a million cluster bombs over southern Lebanon after the release of U.N. Security Council resolution 1701, which has caused some 400 injuries and deaths.

Two suspected Palestinian militants died and an Israeli soldier was wounded late Saturday in an exchange of gunfire near the border of the Gaza Strip with Israel, the Israeli army announced.

Soldiers spotted the two Palestinians near the security barrier separating Israel from Hamas-controlled Gaza and opened fire, killing them after a gun battle lasting some 20 minutes, an army spokesman said.

Hizbullah leader Sayyed Hassan Nasrallah said during an Ashoura council that the party would be targeted by greater conspiracies than the plots unveiled by the cables released by whistleblower WikiLeaks.

Addressing those at the council, Nasrallah said western organizations had carried out studies after the 2006 war between Israel and Hizbullah when homes were being destroyed and 1 million Lebanese were displaced as a result of the Israeli aggression.