In the next few days, Israel will release more than 400 Arab prisoners in exchange for an Israeli businessman and the bodies of three Israeli soldiers held by the Lebanese guerrilla group Hezbollah, officials said Saturday.
The announcement of the planned swap came after years of German-brokered negotiations. Further talks are planned to help Israel win information on its most famous MIA, airman Ron Arad, who is not part of the deal.
Israel is to release 35 prisoners from Arab countries and about 400 Palestinians _ Israel's most significant release of Palestinian prisoners since Ariel Sharon became prime minister three years ago.
Hezbollah is to free Israeli businessman Elhanan Tannenbaum and the bodies of three Israeli soldiers captured by the guerrilla group in October 2000.
German government mediator Ernst Uhrlau said the deal would be concluded "within a week."
The fate of prisoners is an emotionally charged issue for the Palestinians. Israel holds more than 7,000 so-called security prisoners, most rounded up in military offensives in the past three years.
"If 400 Palestinian political prisoners are released, that would bring joy to 400 Palestinian homes," said Kadoura Fares, a Palestinian Cabinet minister and top official in Yasser Arafat's Fatah movement.
Israeli and German officials did not give a list of Palestinians to be freed.
Israel captured most of its Lebanese prisoners during its invasions and occupation of Lebanese territory from 1982 to 2000.
The top Lebanese to be freed are Abdel Karim Obeid and Mustafa Dirani, two guerrilla leaders kidnapped by Israel from south Lebanon in 1989 and 1994.
Also to be released are 21 other Lebanese, five Syrians, three Moroccans, three Sudanese, a Libyan and Steven Smyrek, a 32-year-old German imprisoned in Israel since 1997 for membership in Hezbollah.
Hezbollah guerrillas captured the three Israeli soldiers near the Lebanese-Israeli border in October 2000. Israel has declared Adi Avitan, Beni Avraham and Omar Sawaid dead. But their families hold out hope they are alive.
Israel TV showed the father of one of the soldiers screaming on the phone with Defense Minister Shaul Mofaz.
"You've been negotiating with Hezbollah for months and they never told you whether our boys are alive or dead?" shouted Haim Avraham.
The businessman, Tannenbaum, was kidnapped in the United Arab Emirates, reportedly lured there to take part in a shady business deal.
Israel will also pass along information on 24 Lebanese listed as missing in action and return the bodies of 59 Lebanese killed in battle.
Israeli soldiers kill 2 Palestinians
GAZA CITY, Gaza Strip _ Israeli soldiers on Saturday shot and killed two Palestinian militants staking out an army position with binoculars along the fortified fence between Gaza and Israel.
Members of the al-Aqsa Martyrs' Brigade, a violent extremist offshoot of Palestinian leader Yasser Arafat's Fatah movement, said the men were on an "exploratory mission" to gather intelligence for a future attack.
The military said it had received warnings that militants were planning an attack in the area, and soldiers were continuing searches in the area near the Israeli village of Nahal Oz. The area near the barrier is off-limits to Palestinians and has been a frequent site of violence.