Israeli army fire killed 22 people in south Lebanon on Sunday including a soldier, health officials said, as residents tried to return home on the day Israel was meant to withdraw under a truce deal.

The withdrawal deadline is part of a ceasefire agreement reached two months ago that ended Israel's war with Iran-backed Hezbollah, which had left the Lebanese militant group weakened.

The deal that took effect on November 27 said the Lebanese army was to deploy alongside United Nations peacekeepers in the south as the Israeli army withdrew over a 60-day period that ends on Sunday.

The parties have traded blame for the delay in implementing the agreement, and on Friday Israel said it would keep troops across the border in south Lebanon beyond the pullout date.

Lebanon's health ministry said on Sunday that Israeli forces opened fire on "citizens who were trying to return to their villages that are still under (Israeli) occupation".

The Israeli military said in a statement that its "troops operating in southern Lebanon fired warning shots to remove threats" where "suspects were identified approaching the troops".

A joint statement from the UN special coordinator for Lebanon, Jeanine Hennis-Plasschaert, and the head of the UNIFIL peacekeeping mission acknowledged that "as seen tragically this morning, conditions are not yet in place for the safe return of citizens to their villages". (AFP)