Nearly 1,200 people in Lebanon, mainly civilians, and 157 Israelis, mostly soldiers, died during the 34-day war.
"There is even a near-complete body, a half or three-quarters of a body, from head, to chest to the torso," said Nasrallah.
"They [Israeli army] were so weak on the field that they left behind remains not of one, two or three but a large number of your soldiers."
'Ready for new war'
Speaking about the 2006 war, he claimed Hezbollah had forced the Israeli army to beat a retreat and warned that his group was ready for a new conflict.
"If Israel launches a new war against Lebanon, we promise them a war that will change the face of the entire region," he said.
In his speech, Nasrallah called on Arab governments to confront the "satanic visions" for the Middle East imagined by George Bush, the US president.
He said Bush's plans he said would only serve the interests of the US and Israel, which he termed a "cancerous entity".
"Bush wants to convince our rulers and people that Iran is the enemy, that Iran poses a danger and a threat, and that Israel is a brother, a beloved friend and neighbor for whom we must extend our hand in peace," Nasrallah said.
"Is there in history a greater forgery, deceit and hypocrisy?"
Nasrallah's public appearance comes amid heightened tension in Lebanon, which has been without a president for nearly two months because of a crisis between the Western-backed parliamentary majority and the Hezbollah-led opposition.
Addressing his supporters, Nasrallah reiterated that Hezbollah supported an Arab League plan to resolve the crisis.
The plan envisages General Michel Suleiman, the army chief, in place as president, a national unity government in which no one party has veto power and the adoption of a new electoral law.
But the Hezbollah leader criticised Arab leaders who have been pushing the plan, saying they should refrain from giving lessons about democracy.
"I find it strange that Arab leaders speak about ... democracy when their own regimes know nothing about it," he said.
Nasrallah was speaking after his followers converged on Hezbollah's southern Beirut bastion to mark the climax of Ashura, one of Shia Islam's holiest events.
Hezbollah supporters carrying red, yellow and black banners with the slogan "We will not be humiliated" marched in procession, blocking suburban roads, chanting "Death to America, Death to Israel".
The Shia leader had earlier walked among the Ashura procession, flanked by dozens of black-clad security men, waving to the crowds.
His last public appearance was at a massive "victory" rally in September 2006, in the wake of the war against Israel during which he went into hiding.
Ashura is the 10th day of the lunar month of Muharram, when, according to Islamic tradition, Imam Hussein, the grandson of the Prophet Muhammad, was killed along with most of his family in AD 680 in the Iraqi city of Karbala.