Yasser Ataya, the mayor of the village Teir Harfa, several miles from the Israeli border, said the rocket was fired into southern Lebanon during the 2006 war between Israel and Hezbollah but failed to detonate.
"Thank God there are no casualties," he told The Daily Star newspaper in Beirut.
The force of the blast early Monday shattered windows in the village, the newspaper said.
Citing Lebanese media reports, Israel Radio said it is possible the blast occurred in a Hezbollah arms depot in the village.
Hezbollah members sealed off the area preventing Lebanese military officials and U.N. peacekeepers from reaching the area, the paper said.
Andrea Tenenti, a spokesman for the U.N. Interim Force in Lebanon, said he was able to reach the area shortly afterward.
"We are trying to ascertain the nature of the place and the nature of the explosion," he told the newspaper.