The slain leader, identified as Hassan Hawlo al-Lakiss, was the most senior figure in the Lebanese Shiite movement to be assassinated since Imad Mughniyeh was killed in a Damascus bombing in 2008, which the group also blamed on Israel.
Both men were part of Hezbollah's secretive top leadership.
"The Islamic resistance announces the death of one of its leaders, the martyr Hassan Hawlo al-Lakiss, who was assassinated near his house in the Hadath region" east of Beirut, Hezbollah said.
"This enemy must bear full responsibility for and all the consequences of this heinous crime."
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Israel's foreign ministry spokesman Yigal Palmor dismissed the allegations as "yet another Pavlovian response from Hezbollah, which makes automatic accusations (against Israel) before even thinking about what's actually happened."
"Israel has nothing to do with this," he said.
Al-Manar said Lakiss had been repeatedly shot with a silenced handgun after parking his car in the building where he lived, adding that more than one assailant took part in the attack.
Hezbollah emerged during Lebanon's civil war in the 1980s with the aim of driving Israeli forces out of the country and battled the Jewish state to a bloody stalemate in 2006.