A photo that emerged online over the weekend shows a soldier taking the blunt side of an axe to a fallen sculpture of Jesus on the cross.
It was posted by Younis Tirawi, a Palestinian reporter who has also posted images of Israeli soldiers' apparent misconduct in the Gaza Strip.
Reuters verified the location of the image as Debel, one of the few villages in southern Lebanon where residents remained through an Israeli military campaign against the Iranian-aligned Hezbollah militia that began on March 2 after the group fired rockets at Israel in support of Iran.
The cross was part of a small shrine in the garden of a family living on the edge of the village, said Fadi Falfel, a priest in Debel.
"One of the Israeli soldiers broke the cross and did this horrible thing, this desecration of our holy symbols," he said.
The Assembly of Catholic Ordinaries of the Holy Land, which includes Jerusalem's Catholic Cardinal Pierbattista Pizzaballa said in a statement that the act "constitutes a grave affront to the Christian faith".
"It further reveals a disturbing failure in moral and human formation, wherein even the most elementary reverence for the sacred and for the dignity of others has been gravely compromised," the statement said.
Israeli Prime Minister Benjamin Netanyahu said that the soldier's actions went against Jewish values of tolerance and that he would be punished.
"I was stunned and saddened to learn that an IDF soldier damaged a Catholic religious icon in southern Lebanon. I condemn the act in the strongest terms," he wrote on X.
US ambassador to Israel Mike Huckabee said on X that "Swift, severe, & public consequences are needed."
Israeli Foreign Minister Gideon Saar said the soldier's actions were disgraceful and shameful. "We apologise for this incident and to every Christian whose feelings were hurt," Saar said on X.
The Israeli military said the incident was being investigated.
"The IDF (Israel Defence Forces) views the incident with great severity and emphasises that the soldier's conduct is wholly inconsistent with the values expected of its troops," the military said.
"The IDF is working to assist the community in restoring the statue to its place."
Debel is one of dozens of villages in south Lebanon now under effective Israeli occupation.
Israel and Lebanon on Thursday agreed to a US-brokered ceasefire intended to halt fighting between Israel and Hezbollah.