Brigadier General Yossi Baidatz, the head of the research division of Military Intelligence, made the warning in a speech at the Knesset (parliament) Foreign Affairs and Defense Committee.
"Hezbollah continues to rehabilitate, from a military and a social perspective. It is acquiring a large number of weapons from Iran and Syria," Baidatz told the lawmakers.
"It is preparing itself for possible conflict in the summer, but is not interested in this as it aspires to a period of calm in which to rehabilitate," he added.
On the contrary, Israeli Prime Minister Ehud Olmert told the Knesset last week that "the situation in southern Lebanon has changed completely" since the summer 2006 war between Israeli army and Hezbollah.
Israel launched a full-scale attack on Lebanese Hezbollah guerrillas after they captured two Israeli soldiers and killed three others in a cross-border raid on July 12, 2006.
The 34-day-long Israeli offensive ended without defeating Hezbollah and bringing back the two captured soldiers.
Since Aug. 14 of 2006, the UN has boosted its presence in southern Lebanon as part of a ceasefire deal that ended the 34-day- long fighting.
The UN force, alongside an estimated 17,000 Lebanese soldiers, patrols in the buffer zone between the Lebanese-Israeli border and the Litani River, which is 30 kilometers (18 miles) away at its farthest point, in an effort to prevent the militant group from again seizing control of the region.