BEIRUT, July 7 (Reuters) - Israel and Hezbollah have signed a U.N.-mediated prisoner exchange deal and the date for the swap will be settled this week, a Lebanese political source said on Monday. The source said Hezbollah leader Sayyed Hassan Nasrallah and Israeli Prime Minister Ehud Olmert had both signed the deal under which the Jewish state will release five Lebanese prisoners and Hezbollah will hand over two Israeli soldiers. Hezbollah seized the soldiers -- army reservists Ehud Goldwasser and Eldad Regev -- during a cross-border raid that triggered the 2006 war between the Iranian-backed group and Israel. Hezbollah has given no word on their condition, although they are widely presumed dead. The Lebanese source said he expected the exchange to take place by the middle of next week. "We expect the deal to move ahead, and it is possible we will have Regev and Goldwasser back in Israel next week," a senior Israeli government official in Jerusalem said. Under the deal, which was negotiated by a German intelligence officer, Israel will also hand over the bodies of around 200 Arabs killed while infiltrating northern Israel while Hezbollah would return body parts of Israeli soldiers killed in south Lebanon in 2006. The dead include Palestinian and Lebanese guerrillas killed in decades of conflict with Israel and the bodies of eight Hezbollah fighters. An Israeli military official said Israel would begin exhuming bodies on Monday. The Lebanese prisoners include Samir Qantar, the most prominent held by Israel. He is serving a life sentence for killing a policeman as well as a man and his 4-year-old daughter during a 1979 raid on the northern coastal town of Nahariya. Nasrallah said last week he expected the exchange to take place around the middle of the month. (Reporting by Laila Bassam; Writing by Tom Perry)
A Palestinian who infiltrated into Israel sits blindfolded in an Israeli military base near Kibbutz Kissufim, just outside the Gaza Strip July 7, 2008. REUTERS/Amir Cohen (ISRAEL) ...
