Yahya Rahim-Safavi, the commander-in-chief of Iran's Revolutionary Guards, was quoted in the Iranian daily Kayhan as saying: "Hezbollah announces now it is ready to end the war on the condition that the Israeli regime hands over Lebanese prisoners in its jails."
He said that if Israel wanted peace and calm it should exchange the prisoners, but it seemed that Israel had an objective other than releasing the prisoners.
During the 1980s, the Revoultionary Guards joined the fight between Hezbollah, a Lebanese Shia organisation, and Israeli forces in southern Lebanon, but Tehran says it no longer deploys units there.
Israel has repeatedly accused Hezbollah of using Iranian armaments in its recent attacks.
Hezbollah has said it fired "Raad [Thunder] 2" and "Raad 3" rockets at Haifa - the "Raad" is an Iranian missile.
Mostafa Mohammad Najjar, the Iranian defence minister, has said that Tehran's support is purely moral and denies supplying the group with weapons.