By Haaretz Service and Agencies - 27/8/02006

Hezbollah leader Hassan Nasrallah said Sunday that he did not believe there would be a second round of fighting with Israel, and that Hezbollah would adhere to the cease-fire despite what he called Israeli provocation.

Speaking in an interview to Lebanese television station New TV, Nasrallah said that Israel was trying to press new demands such as the deployment of United Nations forces at Beirut airport, at Lebanese ports and on Lebanon`s border with Syria.

But he added: "Their displaced people are going back and they have started to rebuild the north. Someone who acts like that doesn`t seem to be going to war. We are not heading to a second round."

The Hezbollah leader also said that negotiations on the release of the two Israel Defense Forces soldiers abducted by Hezbollah have already begun.

"Contacts recently began for negotiations," Hezbollah said. "It seems that Italy is trying to get into the subject. The United Nations is interested and the negotiations would be through [Parliamentary Speaker Nabih] Berri."

Hezbollah has been holding the two soldiers since July 12 and demands the release of some of the thousands of Arabs in Israeli prisons in exchange for the kidnapped soldiers.

The operation led to a month of war between Israel and Hezbollah, which took over large parts of south Lebanon. More than 1,300 people were killed, mostly Lebanese civilians.

Germany negotiated an exchange of prisoners between Israel and Hezbollah in 2004, which included the remains of three Israeli soldiers captured on the border. Germany has said it was willing to play a similar role in the case of the recent prionsers.

Earlier this month, Haaretz reported that Israel was willing to discuss a possible exchange.

The UN Security Council resolution which led to a truce on August 14 suggests in its preamble that the two sides are to find a solution to their disputes over prisoners.

Israel, Hezbollah to hold prisoner exchange in 3 weeks
The Egyptian state-run daily Al-Ahram says that Israel and Hezbollah have agreed to terms on a prisoner exchange for the release of two abducted IDF soldiers, Israel Radio reported Sunday.

Reservist soldiers Ehud Goldwasser and Eldad Regev were kidnapped on July 12 in a cross-border raid by Hezbollah guerillas, sparking a 34-day conflict.

According to the report, senior Egyptian officials have told the paper that the exchange will be mediated by Germany and is to take place in two to three weeks` time.

The sources said that the parties are currently negotiating the framework of the deal.

The main points of contention, the sources said, are the order of release of prisoners and the number and identities of the Lebanese prisoners to be freed by Israel.

The sources told Al-Ahram that it has not yet been agreed whether Goldwasser and Regev would be released first, and a day or two later Israel would release Lebanese prisoners according to a list provided by Hezbollah, or whether the exchange is to take place simultaneously.

The report does not mention any of the names of Lebanese prisoners considered for release.

Al-Ahram also reports that once the prisoners exchange with Hezbollah is completed, the Lebanese militant group would signal to the Palestinians that they can agree a deal for the release of IDF soldier Gilad Shalit, abducted by Palestinian militants on the Gaza border in late June.

Beilin: Abbas `not optimistic` on Shalit release
Following his meeting with Palestinian Authority Chairman Mahmoud Abbas, Meretz chairman Yossi Beilin said Sunday that Abbas is not "very optimistic" on the prospects of securing a deal soon for the release of Shalit.

Speaking to Israel Radio, Beilin said that Abbas has been involved in two attempts to release Shalit from his abductors, but both have failed.

Abbas "has told me he is currently involved in a third attempt to bring about [Shalit`s] release, and that he hopes this attempt succeeds," Beilin said.

When asked on Abbas` opinion on the chances that Shalit would be released soon, Beilin said, "I must admit he didn`t sound very optimistic."