Prior to reports of the aftermath of the strike, Hezbollah claimed responsibility for four other attacks.
Twelve children and youths were killed and dozens injured after a rocket hit a soccer field where they were playing in the Israeli-occupied Golan Heights, Israeli authorities said.
The IDF said the rocket, fired by the powerful Lebanese militant group Hezbollah, fell on the Druze town of Majdal Shams, a claim denied by the group.
Israeli Prime Minister Benjamin Netanyahu vowed retaliation against Hezbollah, saying the group would "pay a heavy price".
The incident has the potential to spark an all-out war between Israel and Hezbollah, whose forces have regularly exchanged fire since the start of the Israel-Gaza war that began in October.
Saturday's attack was the deadliest on Israel's northern border since the war began on October 7.
The UN said in a statement that "maximum restraint" was crucial for all sides, with the risk of a wider conflict that would "plunge the entire region into unimaginable catastrophe".
Hezbollah spokesman Mohammad Afif denied the group was responsible for the attack, and the BBC is seeking to verify reports that the militant group told the UN the explosion was caused by an Israeli rocket interceptor.
Israeli authorities said all the dead were aged between 10 and 20, although Israeli media reported that some were younger.
Verified video shows crowds of people on a soccer field and stretchers being wheeled into waiting ambulances.
Majdal Shams is one of four villages in the Golan Heights where some 25,000 members of the Arab-speaking Druze religious and ethnic group live.
Before reports emerged of the aftermath of the strike, Hezbollah claimed responsibility for four other attacks.
One of these was against the military headquarters of the Hermon Brigade, located on the slopes of Mount Hermon, which straddles the border between Israel and Lebanon. The base is about 3 km from the football field.
IDF spokesman Daniel Hagari, who visited the site of the attack, accused Hezbollah of "lying and denying responsibility for the incident."
He said the rocket was an Iranian-made Falaq-1, "which only Hezbollah has."
"Our intelligence is categorical. Hezbollah is responsible for killing innocent children," he said, adding that Israel was preparing to strike back.
While Israel and Hezbollah regularly exchange artillery fire and casualties, since October both sides have refrained from actions that could escalate into a wider war in southern Lebanon.
Israeli Prime Minister Benjamin Netanyahu, who was visiting the United States, returned home early.
Foreign Minister Israel Katz told Israeli news channel 12: "We are facing an all-out war."
Israeli President Isaac Herzog called the incident a "terrible and shocking disaster" and said "the state of Israel will firmly defend its citizens and its sovereignty."
The Lebanese government also issued a rare statement in response, saying it "condemns all acts of violence and aggression against all civilians and calls for an immediate cessation of hostilities on all fronts.
"Targeting civilians is a flagrant violation of international law and contrary to the principles of humanity," the statement added.
The US and the EU also condemned the attack. I BGNES
