The Israeli military said its Home Front Command would ease some war-related restrictions effective midday Thursday, allowing limited activity and permitting public gatherings of up to 50 people.
The latest measures would be applicable until 1800 GMT on March 7.
"As part of the changes, all areas of the country will transition from an essential activity level to a limited activity level," the military announced, soon after it had said the number of missiles fired by Iran towards Israel had declined.
The military said schools and other educational institutions would remain closed.
It said that gatherings of up to 50 people were permitted as long as they were near shelters.
Workplaces were also allowed to reopen as long as they were near shelters.
Meanwhile, the Israeli military said it struck several Hezbollah targets across Lebanon on Wednesday, including rocket and missile launch sites south of the Litani river.
"Among the targets struck were numerous Hezbollah rocket and missile launch sites south of the Litani River... including a drone production facility," the military said, hours after issuing an evacuation order for residents living in the targeted area.
The leader of the Tehran-backed militant group Hezbollah vowed Wednesday to keep up its fight against Israel, whose forces pushed into several border towns and conducted air strikes around Lebanon for a third day.
Lebanon was drawn into the Middle East war on Monday, when Hezbollah attacked Israel in response to the killing of Iranian supreme leader Ayatollah Ali Khamenei during US-Israeli strikes over the weekend.
The group stepped up its attacks on Wednesday, saying it targeted Israeli positions as far as Tel Aviv in at least 15 attacks.
"We are facing aggression... our choice is to confront it until the ultimate sacrifice, and we will not surrender," Hezbollah leader Naim Qassem declared in his first speech since the latest round of fighting broke out.
"For us this is an existential defence," he added.
Lebanese authorities announced at least 72 people killed, 437 wounded and 83,000 displaced from their homes since Monday.
The Israeli military told people living south of Lebanon's Litani river -- a large area stretching around 30 kilometres (20 miles) north of the border -- to evacuate, warning that the army was "compelled to take military action" against Hezbollah in the area.
On Tuesday, Israel's military said it was creating a buffer zone inside Lebanon to protect Israeli residents.
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