BEIRUT Lebanon's Hezbollah and Israel are putting the final touches to an agreement to exchange prisoners, a Lebanese political source said on Wednesday.
The deal, mediated by a U.N.-appointed German negotiator, would see Hezbollah returning two Israeli soldiers captured in 2006 for four Lebanese prisoners and the bodies of about 10 Hezbollah fighters. It is not clear whether either of the Israelis is still alive.
"The two sides are putting the final touches on the swap deal," the source said. "There are some minor details that must be completed and afterwards logistical preparations would be needed."
The source, who requested anonymity, said it would take at least 10 days before the swap happens. He gave no further details.
Asked earlier about possible progress on a swap, German government spokesman Ulrich Wilhelm said: "Due to the nature of the topic I cannot make any comment."
Hezbollah guerrillas captured two Israeli soldiers in a cross-border attack in July 2006 to exchange for Lebanese and Arab prisoners held by Israel.
Israel waged a 34-day offensive in Lebanon after the two army reservists -- Ehud Goldwasser and Eldad Regev -- were snatched, but then entered indirect talks on retrieving them.
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 the reports but its leader Sayyed Hassan Nasrallah said last month the Lebanese prisoners would be coming home soon.
Israel, via German mediators, recently told the Shi'ite Muslim group allied to Iran and Syria it would be willing to free jailed Lebanese fighters in exchange for the two soldiers.
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.
Relatives of the airman, who bailed out over Lebanon during a 1986 raid on a Palestinian refugee camp, cancelled a meeting on Tuesday with Prime Minister Ehud Olmert in protest at plans to release Qantar, Israeli political sources said.
The snub by navigator Ron Arad's family was likely to dent Israeli enthusiasm for the swap. Arad disappeared after being held by Shi'ite militiamen. Israel had long conditioned clemency for Qantar on Hezbollah first shedding light on Arad's fate.
An Israeli political source said Olmert had scheduled a visit with Arad's family to explain his decision to drop this condition, but they cancelled the meeting.
"The prime minister wanted to make the point that while Qantar is no longer a viable 'bargaining chip' for Arad, he can be useful in retrieving our two POWs," a political source said.
Israeli National Infrastructure Minister Binyamin Ben-Eliezer said earlier in the day he was hopeful a deal was close.
Asked if significant progress had been made, he told Israel Radio: "Definitely yes ... Goldwasser and Regev are on their way home."
He said that if the price for a deal was Qantar, so be it.
"We will apologize to the Arad family and say we are sorry. It is painful, but nothing can be done. Ultimately, there are two families waiting and suffering for years and the problem must be solved," Ben-Eliezer said.
(Additional reporting by Dan Williams in Jerusalem; Editing by Dominic Evans)