BEIRUT (Reuters) - Hezbollah leader Sayyed Hassan Nasrallah, in a rare public appearance, welcomed five Lebanese freed from captivity in Israel on Wednesday after his guerrilla group returned the bodies of two captured Israeli soldiers.
Nasrallah, who moves in secret for security reasons, emerged briefly to embrace the ex-prisoners at a rally in Beirut and declared the exchange a victory for Hezbollah and Lebanon.
"This people, this nation and this country, which gave a clear image today, cannot be defeated," he told the crowd before leaving to deliver a speech by video link from a safe location.
A grim mood prevailed in Israel, where the prisoner swap was widely seen as a painful necessity two years after the capture of the two Israeli army reservists sparked a 34-day war in which about 1,200 people in Lebanon and 159 Israelis were killed.
Among the released captives was Samir Qantar, who had been Israel's longest-serving Lebanese prisoner and whom Israelis revile for his part in a 1979 Palestinian guerrilla attack.
The International Committee of the Red Cross brought the men to the border town of Naqoura. Wearing military fatigues, they marched down a red carpet flanked by a Hezbollah honor guard.
Two Lebanese army helicopters then flew them to Beirut, where President Michel Suleiman, Prime Minister Fouad Siniora and Parliament Speaker Nabih Berri kissed them at the airport.
"Your return is a new victory," Suleiman declared.
Israel retrieved the corpses of the two soldiers, Ehud Goldwasser and Eldad Regev, only after agreeing to release Qantar, who had been serving a life term for the deaths of four Israelis, including a 4-year-old girl and her father.
"Woe betide the people who celebrate the release of a beastly man who bludgeoned the skull of a 4-year-old toddler," Israeli Prime Minister Ehud Olmert said in a statement before a private meeting to condole the families of the soldiers.
As fireworks lit the night sky, tens of thousands of people waving yellow Hezbollah flags gathered in Beirut for the rally to celebrate the release of Qantar and four Hezbollah fighters.
Crowds threw rice and mobbed the cars carrying the men to the rally in the southern suburbs, a stronghold of Hezbollah.
The ex-captives waved Hezbollah and Lebanese flags at the crowds before Nasrallah's surprise arrival sent them wild.
The Shi'ite group, which is backed by Iran and Syria, earlier handed over the Israeli soldiers in two black coffins.
The Israeli army said forensic teams had identified the bodies as those of its missing men. Hezbollah had never disclosed whether they were alive or dead, but Israeli officials had said they were badly wounded at the time of their capture.
The release of the Lebanese prisoners, said by Hezbollah to be the last held in Israel, closed a file that has motivated repeated attempts by Shi'ite guerrillas over the past quarter of a century to capture Israelis to use as bargaining counters.
Nasrallah said in his speech that the Israelis knew Hezbollah would have tried to snatch more soldiers if the indirect negotiations over the prisoners had failed.
The fathers of the two Israeli soldiers spoke of their pain at watching the transfer of their sons' coffins on television.
"It is not easy to see this, although there was not much surprise to it. But ... confronting this reality was difficult, yes," Shlomo Goldwasser told Israel radio.
Zvi Regev said on Army Radio: "It was a terrible thing to see, really terrible. I was always optimistic, and I hoped all the time that I would meet Eldad and hug him."
Under the deal arranged by a U.N.-appointed German mediator, Israel also returned the bodies of eight Hezbollah fighters slain in the 2006 war and those of four Palestinians, including Dalal Mughrabi, a woman guerrilla who led a 1978 raid on Israel.
The four were among nearly 200 Arabs killed trying to attack Israel, whose bodies were delivered to Lebanon in ICRC trucks as part of the delicately orchestrated swap. Hezbollah returned the remains of other Israeli troops killed in the south.
Israel is also due to free Palestinian prisoners in future as a gesture to U.N. Secretary-General Ban Ki-moon. Nasrallah said he had written to Ban asking him to use his good offices.
Hezbollah has dubbed the exchange "Operation Radwan", in honor of "Hajj Radwan", or Imad Moughniyah, the group's military commander assassinated in Syria in February.
For some Lebanese, the swap showed the futility of the conflict with Israel two summers ago. "There shouldn't have been a war in 2006. A lot of lives were lost," said Rami Nasereddine, 18, lamenting Israel's refusal to trade captives at the time.
The Palestinian Islamist group Hamas said the Hezbollah deal strengthened its own hand in demanding freedom for hundreds of prisoners in exchange for captured Israeli soldier Gilad Shalit.
(Additional reporting by Nadim Ladki, Tom Perry and Laila Bassam in Beirut, Jeffrey Heller, Ori Lewis, Jospeh Nasr and Dan Williams in Jerusalem, Avida Landau in Rosh Hanikra and Nidal al-Mughrabi in Gaza)