Israel has been pounding south and east Lebanon, areas where Hezbollah holds sway, since all-out war erupted on September 23.
In Lebanese border villages, the rivals have engaged in close-range combat after Israel launched a ground invasion last month.
Hezbollah "announces a transition to a new and escalatory phase in the confrontation with the Israeli enemy, which will be reflected in the developments and events of the coming days," the group said in a statement.
The announcement came after the Israeli military on Thursday said its forces killed Yahya Sinwar, the leader of Hamas, which is a Hezbollah ally.
The statement, however, made no mention of the Hamas chief.
It said "hundreds of fighters...are fully prepared to counter any Israeli ground incursion into southern Lebanese villages," noting that attacks against Israel have increased in recent days.
It said its rocket strikes continue "to escalate day by day," with "precision-guided ones...being deployed for the first time".
Israel killed Hezbollah's leader Hassan Nasrallah in a Beirut air strike On September 27. It has has repeatedly called for Hezbollah to be pushed away from the border to ensure its citizens could return to their homes in northern Israel.
Earlier on Thursday, Hezbollah lawmaker Hassan Fadlallah said that the Israeli army was not fully in control of any village in south Lebanon.
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