The general was identified as the head of an Israeli liaison unit with the Israeli-allied South Lebanon Army militia, which helps patrol the Israeli-occupied region in southern Lebanon.
There was no comment from Israel on the attack or casualties, the second serious blow to the Israeli army in less than a week. On Tuesday, Hezbollah ambushed an Israeli unit, killing its commander and two other officers and wounding five soldiers.
The Iranian-backed Hezbollah group claimed responsibility for the twin bombings, which occurred shortly before midday Sunday.
Israel has occupied the zone in southern Lebanon since 1985 in a bid to protect its northern territory from cross-border attacks. Hezbollah is the most active of guerrilla groups fighting to oust the Israelis and their militia allies.
In a statement issued in Beirut on Sunday, Hezbollah said its guerrillas targeted the convoy of senior Israeli officers as it traveled on a road between the Lebanese villages of Kawkaba and Hasbaya, about four miles north of the Israeli border.
''All those in the convoy were killed or wounded,'' it said.
The group said it detonated another roadside bomb about a half-hour later less than a mile from the first blast. It did not give further details.
Security officials, speaking on customary condition of anonymity, said two soldiers, including a colonel, were also killed. The fourth casualty was believed to be an Israeli civilian.
The general would be the highest-ranking casualty since Brig. Gen. Yekutiel Adam, who was killed in Lebanon in 1982.
Israeli warplanes retaliated later Sunday, attacking suspected guerrilla hideouts in southeastern Lebanon.
Two Israeli jets fired missiles on the hills of Wadi Zileya in the Bekaa Valley, security officials said. The Israeli military confirmed the attack and said all planes returned safely.
There was no immediate word on casualties from the air raid, the second in south Lebanon in as many days.