Israel and Lebanon must show "utmost restraint", the UN Security Council says, after a clash between troops on the border left five people dead.
The UN urged both sides to abide by the deal that ended the last cross-border conflict in 2006.
Both sides blamed each other after three Lebanese soldiers, a Lebanese journalist and an Israeli officer died in the fighting.
Tensions are often high along the heavily fortified frontier.
But Tuesday's deaths marked the most serious incident since 2006, when Israel fought a 34-day conflict with the Lebanese Shia militant group, Hezbollah.
Although the most recent skirmish involved soldiers from the regular army, Hezbollah leader Sheikh Hassan Nasrallah said his militants would not "stand idle".
The Lebanese army said Israeli soldiers crossed the border to uproot a tree which was blocking their view.
Troops then fired warning shots and Israel responded with fire from artillery positions and helicopters.
Israel denied the crossing the border and Prime Minister Benjamin Netanyahu said Israel would respond "aggressively" to any attack.
UN peacekeepers in southern Lebanon say they have seen no evidence that Israeli soldiers had crossed into Lebanon, reports the BBC's Wyre Davies, from the border between the two countries.
The Security Council met to discuss the clash, and afterwards Russia's UN envoy Vitaly Churkin said both sides must "strictly abide by their obligations" under the UN resolution that ended the 2006 conflict.
He said they must "observe the cessation of hostilities and prevent any further escalation".
The UN statement followed a similar plea from US state department spokesman PJ Crowley.
"The region has enough tension as it is, the last thing that we want to see is that this incident expand into something more significant," he said.