By Laila Bassam and Maya Gebeily
BEIRUT (Reuters) - Iran-backed Hezbollah said on Wednesday it attacked Israeli artillery positions with rockets in the first strike at its arch-foe since pager blasts wounded thousands of its members in Lebanon and raised the prospect of a wider Middle East war.
Israel's spy agency Mossad, which has a long history of sophisticated operations on foreign soil, planted explosives inside pagers imported by Hezbollah months before Tuesday's detonations, a senior Lebanese security source and another source told Reuters.
The death toll rose to 12, including two children, Lebanese Health Minister Firass Abiad said on Wednesday. Tuesday's attack wounded nearly 3,000 people, including many of the militant group's fighters and Iran's envoy to Beirut.
A Taiwanese pager maker denied that it had produced the pager devices which exploded in an audacious attack that raised the prospect of a full-scale war between the Iran-backed Hezbollah and Israel.
Gold Apollo said the devices were made by under licence by a company called BAC, based in Hungary's capital Budapest.
There was no immediate word on when Hezbollah had launched its latest rocket attack, but normally the group announces such strikes shortly after carrying them out, suggesting it fired at the Israeli artillery positions on Wednesday.
Hezbollah has vowed to retaliate against Israel, whose military declined to comment on the blasts. The two sides have been engaged in cross-border warfare since the Gaza conflict erupted last October, fuelling fears of a wider Middle East conflict that could drag in the United States and Iran.
Jordan's Foreign Minister Ayman Safadi accused Israel of pushing the Middle East to the brink of a regional war by orchestrating a dangerous escalation on many fronts.
"Hezbollah wants to avoid an all-out war. It still wants to avoid one. But given the scale, the impact on families, on civilians, there will be pressure for a stronger response," said Mohanad Hage Ali of the Carnegie Middle East Center.
Hezbollah, Iran's most powerful proxy in the Middle East, said in a statement it would continue to support Hamas in Gaza and Israel should await a response to the pager "massacre" which left fighters and others bloodied, hospitalised or dead.
One Hezbollah official said the detonation was the group's "biggest security breach" in its history.
Footage from hospitals reviewed by Reuters showed men with various injuries, some to the face, some with missing fingers and gaping wounds at the hip where the pagers were likely worn.
The plot appears to have been many months in the making, several sources told Reuters. It followed a series of assassinations of Hezbollah and Hamas commanders and leaders blamed on Israel since the start of the Gaza war.
TRAIL LEADS TO BUDAPEST
The senior Lebanese security source said the group had ordered 5,000 pagers from Gold Apollo, which several sources say were brought into the country earlier this year.
Gold Apollo founder Hsu Ching-Kuang said the pagers used in the explosion were made by a company in Europe that Gold Apollo named in a statement as BAC.
"The product was not ours. It was only that it had our brand on it," Hsu told reporters at the company's offices in the northern Taiwanese city of New Taipei on Wednesday.
The stated address for BAC Consulting in Hungary's capital Budapest was a peach building on a mostly residential street in an outer suburb. The company name was posted on the glass door on an A4 sheet.
A person at the building who asked not to be named said BAC Consulting was registered there but did not have a physical presence. The CEO of BAC Consulting, Cristiana Barsony-Arcidiacono says on her LinkedIn profile that she has worked as an adviser for various organisations including UNESCO. She did not respond to emails from Reuters.
BAC's registered activities are wide ranging, from computer game publishing to IT consulting to crude oil extraction.
The senior Lebanese security source identified a photograph of the model of the pager, an AR-924. Hezbollah fighters have been using pagers as a low-tech means of communication in an attempt to evade Israeli location-tracking.
The senior Lebanese source said the devices had been modified by Israel's spy service "at the production level." Israeli officials did not immediately respond to Reuters requests for comment.
"The Mossad injected a board inside of the device that has explosive material that receives a code. It's very hard to detect it through any means," the source said.
The source said about 3,000 of the pagers exploded when a coded message was sent to them, simultaneously activating the explosives.
Another security source told Reuters that up to three grams of explosives were hidden in the new pagers and had gone "undetected" by Hezbollah for months.
In a televised speech on Feb. 13, the group's Secretary General Hassan Nasrallah sternly warned supporters that their phones were more dangerous than Israeli spies, saying they should break, bury or lock them in an iron box.
Instead, Hezbollah opted to distribute pagers to its members across the group's various branches - from fighters to medics working in its relief services.
Israel's Mossad has gained notoriety for its complex operations stretching back to the daring 1960 abduction of high-ranking Nazi Adolf Eichmann. More recently, the spy agency has been blamed for cyber attacks and the assassination of a top Iranian scientist in 2020 with a remote-controlled machinegun.
(This story has been corrected to say pagers, not pages, in the second bullet point)