Citing diplomatic sources, the report said the Iranians were identified by documents found on their bodies, but gave no further details on how many were discovered or when.

Hezbollah said in a statement: "Hezbollah categorically denies the lies and claims that the enemy is promoting that Iranian fighters are present in the confrontations with the occupation forces."

Iran, like Syria, insists it gives only moral support to the Shia group.

Israeli push

Witnesses said that Israeli forces were pushing around 10km (6miles) into southern Lebanon, further forward than they have been in the four-week conflict.

They said Israeli troops, supported by heavy artillery shelling, were at the outskirts of the village of Dibeen.

Lebanese police said that an Israeli armoured column was also heading for Khiam, a town in the east of south Lebanon where Hezbollah fighters are positioned.

According to the Israeli military, the advance did not mark the major extension of ground operations agreed at a security cabinet meeting on Wednesday.

Fifteen Israeli soldiers were killed in clashes with Hezbollah in south Lebanon on Wednesday.

Another 38 soldiers were wounded in the fierce fighting, the Israeli military said.