Hezbollah's chief Sayyed Hassan Nasrallah on Thursday threatened Israel with open war after accusing the Jewish state of killing one of its top commanders.

Zionists, if you want this type of open war then let the whole world hear: let it be an open war, Nasrallah told mourners at the funeral of Imad Moughniyah, a legend to Hezbollah but one of the men most wanted by Israel and the U.S. for planning attacks that killed hundreds.

Moughniyah, hunted by Israel and the United States for two decades, was killed by a bomb in Damascus on Tuesday.

Shi'ite Muslim Hezbollah and its main backer Iran accused Israel of killing him. Israel rejected the charge, though its Mossad spy service had long sought to kill him.

The Jewish state put its embassies and other interests abroad on high alert and boosted troop deployments on the Lebanese border for fear of reprisal.

We have the right, like all human beings, of self-defence and, God willing, we will do whatever is required to defend our brothers, leaders, people and our country, Nasrallah said, addressing the mass funeral via video link.

He said the group's initial investigation into the killing showed that Israel was behind it. He gave no details.

Nasrallah said that while Moughniyah's assassination delivered the group a painful blow, it would not weaken it or its military structure. A visibly emotional Nasrallah said Moughniyah had played a major role in Hezbollah's 34-day war against Israel in 2006.

Naim Kassem lead prayers over Moughniyah's coffin, flanked by other members of Hezbollah's leadership, at a mosque in Beirut's southern suburb. The coffin, draped in a yellow Hezbollah flag, was then carried out by guerrillas to where thousands had lined up under driving rain.

Some in the crowd wept while most waved goodbye.

Iran's Foreign Minister Manouchehr Mottaki attended the funeral and read a condolence note from Iranian President Mahmoud Ahmadinejad.

HARIRI'S ANNIVERSARY

Reflecting deep divisions in Lebanon, Moughniyah's funeral took place shortly after a rally by the anti-Syrian ruling coalition to mark the third anniversary of the killing of former Prime Minister Rafik al-Hariri.

A large crowd waving red, white and green Lebanese flags, gathered in pouring rain at Martyrs' Square in the centre of Beirut to listen to speeches by anti-Syrian leaders, including Hariri's son and political heir, Saad.

Hariri said his hand was extended to the Syria-backed opposition to end 15 months of conflict that has deepened communal divisions and left the country without a president since November.

Hariri's assassination on February 14, 2005, plunged Lebanon into its worst crisis since the 1975-90 civil war and led to the withdrawal of Syrian forces from the country. Anti-Syrian politicians blame Damascus for his death. Syria denies links.

Moughniyah was the most senior member of Hezbollah to be killed since its previous secretary-general, Abbas Mussawi, died in a 1992 Israeli helicopter ambush in southern Lebanon.

Moughniyah was implicated in the 1983 bombings of the U.S. embassy and U.S. Marine and French peacekeeping barracks in Beirut, which killed over 350 people, as well as the kidnapping of Westerners in Lebanon in the 1980s.

Israel accuses Moughniyah of planning the 1994 bombing of a Jewish centre in Buenos Aires that killed 85 people and of involvement in a 1992 bombing of the Israeli embassy in the Argentine capital that killed 28.

The United States indicted him for his role in planning and participating in the 1985 hijacking of a U.S. TWA airliner and the killing of an American passenger. Washington welcomed Moughniyah's death.

Moughniyah is thought to have been commander of Islamic Jihad, a shadowy pro-Iranian group which emerged in Lebanon in the early 1980s and was believed to be linked to Hezbollah.

The group claimed many kidnappings and bombings but disappeared after the release of the last Western hostages in Lebanon shortly after the end of the civil war in 1990.

Israel