"UNIFIL has found nothing to support these Israeli claims," Williams said in an interview published Thursday by Al-Akhbar daily.
He denied that the use of cameras in the South was the reason for tension, stressing that several issues contributed to the explosive situation, including the military presence among the population.
Williams had said that trouble between U.N. peacekeepers and villagers in southern Lebanon was over.
Residents in south Lebanon had earlier this month disarmed a French patrol and wounded a French soldier.
The incident followed a series of confrontations over protests that UNIFIL had stepped up its patrols and was failing to coordinate with the Lebanese army in the border area.
"I can confirm that the situation in the south is now much better, that I believe that calm and stability have been returned," Williams told reporters after briefing the U.N. Security Council.
The U.N. envoy said he and UNIFIL Commander Maj. Gen. Alberto Asarta had met Lebanese military officials and political leaders, including Hizbullah.
"In the course of those meetings, we heard that they would do everything possible to prevent a recurrence of those incidents,"
Williams said. Williams said negotiations with Israel over the occupied village of Ghajar were "taking too long."
"We discussed in (the Security) Council new ways that we might approach that and I hope we can do so in the coming weeks," he said.