Israeli cabinet to vote on Hezbollah swap Sunday

By Dan Williams

JERUSALEM (Reuters) - Prime Minister Ehud Olmert will ask Israel's cabinet on Sunday to approve a prisoner swap with Hezbollah, the wife of an Israeli soldier held captive by the Lebanese guerrilla group said on Tuesday.

Karnit Goldwasser, whose husband Ehud and fellow army reservist Eldad Regev were abducted by Hezbollah in a July 2006 border raid that triggered a 34-day war in Lebanon, spoke after meeting Olmert.

"The deal, as he promised me, will be brought for a vote on Sunday," she told Israel's Channel Ten television. "I very much hope the ministers ... will make the decision to bring Udi and Eldad home."

There was no immediate comment from the Israeli government.

Through a U.N.-appointed German mediator, Israel has offered to release five jailed Lebanese guerrillas in exchange for the soldiers, security sources said.

Hezbollah has been tightlipped on progress in the indirect negotiations but a Lebanese political source said last week that "final touches" were being put on a swap deal.

Israel's military rabbinate announced this week it was studying intelligence assessments that Goldwasser and Regev did not survive their abduction, and may declare them dead.

Such a move could draw pressure on Olmert from his defense chiefs to offer Hezbollah only the bodies of Lebanese fighters held in Israel, rather than live prisoners -- even at the risk of ruining the deal.

"The feeling among some of the brass is that to give up living bargaining chips in exchange for bodies would set a terrible precedent," an Israeli security source said.

"If the enemy knows he can get so much for a dead captive, it would place our troops at risk of being executed -- or, if they are wounded, untreated -- should they be taken prisoner."

Asked if she believed Sunday's cabinet meeting -- the regular weekly session -- would precede any declaration by the military rabbinate on whether the soldiers are alive or dead, Goldwasser said: "I really hope that is how it turns out."

Israeli Defense Minister Ehud Barak said Goldwasser's and Regev's condition should not be allowed to affect any deal with Hezbollah. "We have a responsibility to bring the captives home even if they are dead," he told reporters.

(Editing by Diana Abdallah)