Club Med crafts instructor Franck Etienne was asleep in a straw hut on the resort's beach in western Galilee when rockets slammed into the ground nearby early Friday.
"I heard explosions all around me. I got down under the bed, and they (rockets) kept falling," said Etienne, who was hit in the leg by shrapnel from rockets fired by guerrillas in Lebanon.
A 24-year-old French butcher for the resort was killed in the barrage. His name was not released. Eight employees and guests were slightly injured _ four from France, one from Spain and three from Israel, including an 8-year-old boy.
Dozens of grim-faced tourists in shorts and bathing suits were evacuated from Club Med after the attack. Like all Israeli resorts, it has an underground shelter.
Israel retaliated with air strikes and artillery fire against strongholds in southern Lebanon of the Shiite Muslim group Hezbollah.
Israeli leaders accused Hezbollah of trying to sabotage Israeli-Syrian peace talks that are to resume in Washington next week.
Hezbollah's attack came a day after a Lebanese villager was killed in Israeli shelling.
A senior Hezbollah official in south Lebanon, Sheik Nabil Kaouk, said the group was "committed to retaliating for every aggression against peaceful, unarmed civilians."