Israeli tanks shelled Lebanese Army positions late last night after coming under fire as they joined an operation to comb the border area for explosive devices placed by Hizbollah guerrillas.

The Israel Defence Forces said early today that an engineering force had been searching for further devices after finding four along the border on Monday, when it came under fire from Lebanese Army units.

It said that the Lebanese units had fired warning shots towards IDF forces operating within Israeli sovereign territory, though north of the perimeter fence, despite an official warning to the United Nations Interim Forces in Lebanon [Unifil] that it would be conducting a sweep of the area.

The IDF said that despite warnings to stop, the Lebanese troops then fired at the Israeli forces who then returned fire. As Unifil ­ now strengthened as an international force after the end of last summer's Lebanon war ­ sought to mediate, the Israeli military said that it was not aware of any injuries, although there were unconfirmed reports of Lebanese troops being wounded.

Meanwhile, the Saudi royal family started their attempt yesterday to broker a coalition agreement between Hamas and Fatah, which could avert the threat of civil war in Gaza and end the international blockade of the Palestinian Authority.

As leaders of both factions underlined the urgent need for a successful outcome, Mahmoud Abbas, the Palestinian President, went out of his way at the televised start of the meeting overlooking the Grand Mosque in Mecca to say that he wanted a "government that can end the blockade".

The international "quartet" of the United States, United Nations, European Union and Russia has so far insisted that it will only lift the economic boycott of the Hamas-dominated PA if any new coalition signs up to the principles of recognising the state of Israel, renouncing violence and abiding by previous agreements.

In one of the few Israeli comments so far on the summit, the Foreign Minister, Tzipi Livni, said the world would not accept any Palestinian government that did not meet the internationally ratified conditions. This was echoed by Margaret Beckett on her first visit to Israel and the occupied territories since becoming the British Foreign Secretary.

Mrs Beckett said after meeting Palestinian officials in Ramallah: "If [the factions meeting in Mecca] do come to a satisfactory conclusion ­ a government of unity that is based on... principles that the international community can accept ­ that will be a very encouraging sign."