Tel Aviv  - Israel is closely watching events in Lebanon, but has no reason to intervene for the moment, Deputy Defence Minister Matan Vilnai said Sunday.

He told Israel Radio that the recent fighting in Lebanon, which saw Iranian-backed Hezbollah guerrillas seize control of much of West Beirut, was "worrying" and said one of the worst possible scenarios, form Israel's point of view, was for Iran to take control, via allied militias, of Lebanon and the Gaza Strip.

Israel says Hamas, which administers the coastal salient, receives financial backing and weapons from Iran.

At least 35 people have died in four days of street battles across Lebanon, after Hezbollah and its allies from the Shiite Amal movement took to the streets to protest a Lebanese government decision to launch a probe into a communication network Hezbollah established.

Israel regards Iran is its biggest existential threat, given Tehran's nuclear programme and comments by President Mahmoud Ahmadinejad that the Jewish state should be wiped off the map.

Israel and Hezbollah fought an inclusive war over 33 days in the summer of 2006. (dpa)