According to a statement by the Lebanese military, the incursion occurred just after 12:00 am local time on Wednesday (21:00 GMT on Tuesday) near the town of al-Labouneh in southern Lebanon.
The statement said the Israeli troops crossed the UN-designated Blue Line on foot and penetrated "roughly 400 meters inside Lebanon."
A UN peacekeeper deployed in the area said the Israeli army unit, which was made up of 10 soldiers, withdrew after the explosion and took the wounded soldiers with them, adding that troops on the Israeli side fired flares to light up their exit.
The Lebanese army called the incident "a new violation of Lebanese sovereignty."
An Israeli military spokesman, however, said the soldiers were involved in "an activity near Lebanon border" without providing details about their exact location or what caused the explosion.
The troops were "carrying out nocturnal activities in the Lebanese border area when the explosion occurred," the spokesman said, adding that the wounded had been hospitalized.
Lebanon's caretaker Foreign Minister Adnan Mansour has condemned the incursion as a violation of UN Resolution 1701.
He also said that Beirut will file a complaint with the UN Security Council about the recent Israeli incursion.
The Blue Line (the border fence between Israel and Lebanon) was drawn up in 2000 by the UN after Israeli troops withdrew, ending a 22-year occupation of south Lebanon. The area is heavily mined.
NTJ/HH