Ministers from Hezbollah and its ally Amal boycotted a cabinet session on Thursday in protest over the government declaring the Iranian ambassador persona non grata.
The two Shia parties have a combined four ministers, with one independent Shia also represented in the cabinet present at the meeting, as the spat over the Iranian diplomat's expulsion escalated.
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The Israeli military said Thursday that its forces had killed around 700 Hezbollah militants since the war with the Lebanese armed group began on March 2.
"So far, I can provide you a number of approximately 700 (Hezbollah) terrorists that have been eliminated," military spokesman Lieutenant Colonel Nadav Shoshani told journalists.
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Pakistan's Foreign Minister Ishaq Dar said Thursday that indirect negotiations were being held to end the war in Iran, using Islamabad as an intermediary.
Dar, who is also deputy prime minister, described speculation about "peace talks" as "unnecessary", adding: "In reality, U.S.-Iran indirect talks are taking place through messages being relayed by Pakistan.
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U.S. President Donald Trump is ready to "unleash hell" if Iran does not accept a deal to end the nearly four-week Middle East war, the White House warned Wednesday, but a defiant Tehran said it did not intend to negotiate.
The ramped-up rhetoric dashed hopes of any imminent de-escalation as violence on the ground showed no sign of abating, with Iran, Israel, Lebanon, Bahrain, Kuwait, Jordan and Saudi Arabia all coming under fire.
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Kuwait arrested six people linked to Lebanon's Iran-backed Hezbollah group who were planning "assassinations" in the Gulf state, the interior ministry said on Wednesday.
Those arrested were planning "assassinations targeting symbols and leaders of the state and recruited people to carry out these missions," the ministry said in a statement.
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An Israeli soldier was killed in fighting in south Lebanon on Thursday, the military said, as Israeli troops advanced from the southern border town of Taybeh toward Qantara and Deir al-Seryan near the Litani river.
Hezbollah claimed attacks on troops in the three villages and six others -- Mays al-Jabal, Qawzah, Debl, Khiam, Alma al-Shaab, and Maroun al-Ras.
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While Washington has signaled a diplomatic off-ramp from its war with Iran, Israel is preparing for the opposite in Lebanon -- an open-ended military campaign against Hezbollah.
Analysts said the message from Israel was a blunt one: Hezbollah must be disarmed, and that will take time.
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Israeli Prime Minister Benjamin Netanyahu said on Wednesday that Israel's forces were expanding a "buffer zone" in southern Lebanon as the military pressed ahead with its war against Hezbollah.
"We have created a genuine security zone preventing any infiltration toward the Galilee and the northern border," Netanyahu said in a video statement.
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Lebanon's government has been wedged into a war not of its choosing between Hezbollah and Israel, as the Iran-backed militants harden their stance and Israel demands the group's elimination.
Beirut has been struggling to pull the country back from the brink after Hezbollah drew Lebanon into the Middle East war on March 2, firing rockets into Israel to avenge the killing of Iran's supreme leader.
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Iranian state television, citing an unidentified senior official, said Wednesday that Iran had rejected a peace plan proposed by the United States to end the Middle East war.
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