Hezbollah ally says Israel swap deal may be close

BEIRUT (Reuters) - A Lebanese political leader allied to Hezbollah indicated on Tuesday a prisoner swap deal between the militant Islamic group and Israel may be close.

"We know that the deal to release the prisoners may be under completion," Michel Aoun told reporters in Beirut. The Christian opposition leader gave no further details.

Hezbollah guerrillas captured two Israeli soldiers in a cross-border attack in July 2006 to exchange them for Lebanese and Arab prisoners.

Israel waged a 34-day offensive in Lebanon after the two army reservists were snatched, but then entered indirect talks on retrieving them, albeit clouded by doubts over whether they were alive.

Relatives of one of the two captive soldiers said on Monday they had been told by an Israeli negotiator that a German-mediated prisoner swap was coming together.

Hezbollah has not officially commented on reports that Lebanese prisoners would be coming home soon.

Israel recently told the Shi'ite Muslim group allied to Iran and Syria through the German mediators it would be willing to free jailed Lebanese fighters in exchange for the two soldiers.

Israel holds at least four Lebanese prisoners and the bodies of 10 Hezbollah guerrillas.

Topping the proposed release roster is Samir Qantar, who is serving a life sentence for a deadly 1979 raid and whom Israeli officials previously described as a "bargaining chip" for the return of a missing Israeli airman.

Qantar's lawyer, Elias Sabbagh, told Army Radio on Monday that "all the signs and indications are that a deal is coming together", but cautioned he had not heard anything official.

(Reporting by Laila Bassam)