Israel has submitted a formal complaint to Britain after the UK ambassador to Lebanon said that Europe's decision to blacklist Hezbollah was not because of its behaviour towards Israel.
Jerusalem claimed that Tom Fletcher's remarks would encourage future attacks on Israeli civilians.
In an interview with Al-Monitor, a Middle East online news source, Mr Fletcher said: "There has been a lot of distortions on that subject .. I invite people to look at the facts: there was an attack inside Europe and it killed people. We do not accept terrorism in Europe."
Mr Fletcher was referring to a bus bombing that killed five Israeli tourists and a Bulgarian driver at the Black Sea city of Burgas in 2012.
The decision to add Hezbollah to the European Union terror list last month was because of this attack, he said.
Footage from a Lebanese news agency shows the aftermath of a large explosion in a southern suburb of Beirut.
A number of cars are still on fire but the scale of the damage to the Hezbollah building is not yet visible.
The death toll from an explosion at a Hezbollah stronghold in southern Beirut has risen to at least three with a further 20 people injured, the Lebanese state news agency reports.
At least one person has been killed and three others injured in an explosion in the Lebanese capital Beirut, a witness has told Reuters.
The blast took place near a complex belonging to the political party and militant group Hezbollah in a southern suburb of the city.
Foreign Secretary William Hague said the European Union's agreement to add Hezbollah's military wing to its terror list show the EU "stands united against terror attacks":
European Union foreign ministers have agreed to put the military wing of Lebanese militant group Hezbollah on the EU's terror list, Reuters have reported.
Two rockets have hit a Hezbollah-controlled district in southern Beirut, in apparent response to the group's commitment to fight in Syria, say local residents.
Britain has formally asked the European Union to put the military wing of Islamist group Hezbollah on its list of terrorist organisations, an EU diplomat has said.
Britain'smove comes after Bulgaria accused the Lebanese militant movement on February 5 ofcarrying out a bomb attack on a bus in the Black Sea city of Burgas that killedfive Israelis and their Bulgarian driver in July last year.
Terry Waite has met with Hezbollah leaders for a 'reconciliation with the organisation that was responsible for his kidnapping 25 years ago.
Last week, Mr Waite returned to Lebanon, a quarter of a century after he was seized in 1987 and held for almost five years.
While in captivity he was chained to a radiator, regularly beaten and subjected to a mock execution.
In a secretly arranged rendezvous in a Hezbollah stronghold in southern Beirut, Mr Waite held two-hour talks with Ammar Moussawi, one of the groups most senior figures, the Sunday Telegraph reports.