BEIRUT (REUTERS) - Syria said its troops destroyed an Israeli vehicle that crossed into its territory from the Israeli-occupied Golan Heights on Tuesday and warned that any attempt to violate its sovereignty would meet "immediate and firm retaliation".

Israel denied the report, saying one of its vehicles was hit by gunfire on its side of Golan ceasefire line, but the incident highlighted the potential for renewed conflict along a frontline that has been largely quiet for nearly four decades.

In a statement broadcast by Syrian state television, Syria's military leadership said its forces destroyed an Israeli vehicle that had crossed the ceasefire line, heading for the Syrian village of Bir al-Ajam.

The Israeli military said a vehicle had been damaged by gunfire from Syria but no Israeli soldiers were hurt. Israeli troops returned fire after the incident, it said.

The incident was the latest on an increasingly fraught frontier where Syrian officials have reportedly threatened to unleash Palestinian guerrillas in response to Israeli air strikes near Damascus and several UN peacekeepers have been abducted by rebels.