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Israel's military said a car was speeding toward soldiers when one of them opened fire. The baby's grandmother, who said she was in the car, disputed that account.
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The Defense Department has increased the counterintelligence threat assessment to its highest level, and Israel is believed to have eavesdropped on American negotiations with Iran.
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Israel invaded Lebanon and occupied parts of the country to fight Hezbollah, an Iran-backed armed group, but its military offensive has drawn in others.
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The U.S.-brokered agreement requires Hezbollah, which Iran backs, to stop firing first. But the group, not party to the talks, rejected the conditions as a virtual surrender.
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