Zvi Rish, the Israeli lawyer that represents two detained Hizb Allah leaders, said on Saturday his clients and other prisoners from Arab countries would be freed in exchange for Israeli businessman Elhanan Tannenbaum and the bodies of three Israeli soldiers - all captured by Hizb Allah in October 2000.

Rish said the deal would include the release of his clients, Hizb Allah leaders Mustafa Dirani and Shaikh Abd al-Karim Ubaid.

German confirmation

Germany's government, which helped broker the deal, confirmed the news. "With this agreement Israel and Hizb Allah have achieved a breakthrough in seeking to soothe one of the most painful consequences of the Middle East conflict," the German government said in a statement. 

"We expect the deal to be implemented over the course of the next week," German government intelligence coordinator Ernst
Uhrlau told reporters. He said the prisoners would probably
first be flown to Germany before being flown home. 

Uhrlau said Iran had played a helpful role in the talks. Asked if Iran had helped put pressure on Hizb Allah, he said: "Iran can be very persuasive in its arguments." 

Hizb Allah statement

"With this agreement Israel and Hizb Allah have achieved a breakthrough in seeking to soothe one of the most painful consequences of the Middle East conflict"

German government statement

The Lebanese group confirmed the deal, saying it would include the release of 23 Lebanese and 35 Arab prisoners. Another 400 Palestinians from the occupied West Bank and Gaza Strip would also be released.

"Hizb Allah confirms what was announced by the German mediator about an agreement on exchanging captives and prisoners with the Israeli enemy, and confirms the details in the German announcement," a Hizb Allah statement said.

Israel kidnapped Ubaid and Dirani from Lebanon in 1989 and 1994 respectively. It was holding them as bargaining chips for the release of Israeli pilot Ron Arad, whose plane was shot down over Lebanon in 1986.

From its part, the Israeli government confirmed the exchange deal. "According to a government decision taken on 9 November, it has been arranged for the return of the three Israel Defence Forces (IDF) soldiers ... who were kidnapped on 7 October, 2000 ... and the civilian Elhanan Tannenbaum," a statement from the office of Prime Minister Ariel Sharon said.  

Hizb Allah says Tannenbaum is a Mossad agent they lured to Beirut.

Al-Qantar will not be freed

The Lebanese fighter Samir al-Qantar, whom Israel jailed in 1979 for the death of three members of an Israeli family during a raid in northern Israel, would not be freed.  

Samir al-Qantar is serving a 542-
year sentence

Aljazeera reported Israel would hold on to al-Qantar for another three months while resuming negotiations between the two sides over Arad.

Israel said on Saturday it would not free al-Qantar, until it had received "substantial proof" of the fate of Arad.

Arad's exclusion from the current deal has drawn furious protests from Arad's family and thousands of supporters in Israel who hoped Dirani and Ubaid would be used as bargaining chips for the airman's release. 

There have been no known signs of life from Arad since 1988, but his relatives believe he is still alive, and the Israeli military has not declared him dead. 

Hizb Allah Secretary General Sayyid Hasan Nasr Allah had demanded al-Qantar's release. Al-Qantar, who belonged to a Palestinian group at the time of the raid, is the longest-held Lebanese prisoner and is serving a 542-year sentence. 

Israel has balked at releasing al-Qantar because, in the words of Israeli officials, he has "blood on his hands". 

Hizb Allah spearheaded the campaign to oust Israeli forces from south Lebanon in May 2000, following a 22-year occupation.