Israel agreed to swap five jailed Hezbollah militants yesterday, including a notorious terrorist, for the remains of two soldiers whose abduction sparked the 2006 invasion of Lebanon.

The exchange could take place as early as this week after the Israeli Cabinet voted to authorise it by 20 to 3.

Lebanese officials said that the Islamist group Hezbollah was eager to see the deal through, and would press for the swap to take place within five to ten days.

Under the German-brokered deal, Israel would free Samir Kantar, whose 1979 attack on an Israeli family is remembered as one of the cruellest acts of terrorism in the Jewish state’s history.

Ehud Olmert, the Israeli Prime Minister, addressed his Cabinet before the vote, revealing that the two Israeli soldiers, Ehud Goldwasser and Eldad Regev, were killed during the raid or soon afterwards. “We know what happened to them . . . As far as we know, the soldiers Regev and Goldwasser are not alive,” he said.

Karnit Goldwasser, the wife of the soldier, expressed shock at the Prime Minister’s declaration. Moments before Mr Olmert and the Cabinet convened to approve the exchange, the Goldwasser family had said that they were still hoping the soldiers would be returned alive.

“The Prime Minister’s position that the sons are not alive is unacceptable to us. We are talking about an assumption based on partial information, and so we are saying that even if there is an assessment that they are not alive, then we must bring them back home as soon as possible,” said Shlomo Goldwasser, the soldier’s father.

Hezbollah had claimed previously that it had captured the soldiers alive, but refused to provide proof of life or allow the Red Cross access to them. It was to free the two captured soldiers that Israel launched its invasion of Lebanon in the summer of 2006. The offensive’s other stated goal, to root out Hezbollah from southern Lebanon, was not achieved either.

Mr Olmert’s revelation added fuel to the fierce public debate over the price Israel is willing to pay for returning kidnapped soldiers. The emotional debate has pitted the bereaved families of those killed by terrorists against the family members of Israeli soldiers who have gone missing in action or have been kidnapped by guerrilla groups.

Enemy states surrounding Israel have a long history of kidnapping Israeli soldiers and exacting a high price for their return. The military ethos runs deep among Israeli society, where most young men and women perform compulsory military service.

While the current deal does not involve the large numbers seen in previous swaps, it has angered many Israelis who remember the crime that landed Samir Kuntar in jail. The story of Kuntar’s murder of an Israeli father and his four-year-old daughter have been etched on to the minds of the Israeli public for their particular brutality. Kuntar, then 16, shot Danny Haran in front of his daughter, then smashed the crying girl’s skull against a rock with his rifle.

During the attack, Danny Haran’s wife, Smadar, accidentally smothered their two-year-old daughter in a frantic attempt to keep her quiet so Kuntar and his comrades would not find them in their apartment. Two Israeli policemen were also killed.

Speaking after the Israeli Cabinet’s decision, Smadar Haran-Kaiser said that she was devastated to hear about Kuntar’s imminent release, but could understand the good it would serve for the Goldwasser and Regev families.

“The despicable murderer Kantar was never my own personal prisoner, but the state’s prisoner. Even if my soul should be torn, and it is torn, my heart is whole. There is no doubt that today’s discussion has special weight and is exceptionally sensitive in terms of its national and moral implications.”

Hezbollah militants have tried to secure Kuntar’s release for years, but Israel had hoped to release him only in exchange for the missing Israeli airman Ron Arad, whose plane crashed in Lebanon in 1986.

Israeli officials said yesterday that they had given up hope of obtaining more information on Mr Arad, and had determined that it was more critical to use Kuntar as a bargaining chip for the present deal.

In addition to the two captured soldiers held in Lebanon, Israel is trying to win back a third soldier captured by Palestinian militants in a June 2006 cross-border raid from the Gaza Strip. Sergeant Gilad Schalit has sent letters and an audio tape to his parents and is believed to be alive, though he has not been seen since.

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