International Red Cross vehicles on Friday brought the bodies to southern Lebanon's Naqura border crossing where they were transferred to Lebanese ambulances as UN peacekeepers monitored the process and Hizb Allah guerrillas in black uniforms saluted the caskets.
Lebanon had demanded the return of the bodies as a step towards defusing the tensions along the Lebanese-Israeli border, which erupted in heavy clashes this week.
Israel killed four guerrillas on Monday and took three of the bodies, while the fourth Hizb Allah member died on the Lebanese side.
An Israeli army statement said the three bodies were returned to Lebanon "following the Lebanese government's urgent request to do so."
Israel had previously held the bodies of Hizb Allah fighters for long periods before eventually swapping them with Lebanon for the remains of Israeli soldiers or prisoners. But its quick return this time reflects the keenness of both Israel and Lebanon to restore calm on the frontier and deny Hizb Allah a pretext to launch further attacks against Israel.
Black-uniformed Hizb Allah guerrillas lined both sides of a stretch of road at Naqura, about 100km (60 miles) south of the capital, Beirut, and saluted as the caskets were carried past on the shoulders of other members of the armed group.
"We hold our head high with martyr Wissam and his comrades and we wish to continue on this course"
Rabih Bawad, brother of one of the slain guerrillas
Families of the guerrillas and Hizb Allah supporters were among several hundred people waiting for the bodies. Some threw flower petals at the caskets, which were wrapped in Hizb Allah's yellow flags.
The group's commander in southern Lebanon, Shaikh Nabil Kauk, placed wreaths on the coffins.
Shouts of "Death to Israel" and "Death to America" rang out from young supporters who punched the air with their fists and praised Hizb Allah and its leader, Shaikh
Rabih Bawad, brother of slain guerrilla Wissam Bawab, said he was happy to see his body returned.
"We hold our head high with martyr Wissam and his comrades and we wish to continue on this course," he said on Hizb Allah's al-Manar television from Naqura.
A larger ceremony is planned for later on Friday in Hizb Allah's southern Beirut stronghold.
Monday's fighting, in which 11 Israeli soldiers were also wounded, was the heaviest in recent times and saw Israeli warplanes and artillery bombard Hizb Allah positions and guerrillas fire missiles at Israeli military outposts.
Fighting briefly resumed on Wednesday when an Israeli civilian in a hang glider drifted across the border and landed inside Lebanon. Israeli troops shot at Hizb Allah guerrillas to prevent them capturing the civilian as he ran back to Israel.
Also on Wednesday, Israeli planes dropped thousands of anti-Hizb Allah leaflets over Beirut and other Lebanese regions.