The Israeli army has identified bodies handed over by Hezbollah as those captured by the Lebanese group two years ago.
Israeli generals were on the way to notify the families of Ehud Goldwasser and Eldad Regev. An Israeli military spokesman said earlier there would be no official announcement on the matter until the families were informed.
Hezbollah handed the bodies of two Israeli soldiers to the Red Cross this morning to be exchanged for Lebanese prisoners held by Israel.
Many Israelis see it as a painful necessity, two years after the soldiers' capture sparked a 34-day war with Hezbollah that killed about 1,200 people in Lebanon and 159 Israelis.
Two black coffins were unloaded from a Hezbollah vehicle at a UN peacekeeping base on the Israel-Lebanon border after a Hezbollah official, Wafik Safa, disclosed for the first time that the army reservists were dead.
The International Committee of the Red Cross took the coffins and drove them into Israel. Mr Safa later said DNA tests conducted by the ICRC had verified the identity of the soldiers.
In a deal mediated by a UN-appointed German intelligence officer, Israel freed Samir Kantar and four other prisoners.
Kantar had been serving a life prison term for the deaths of four Israelis, including a four-year-old girl and her father, in a 1979 Palestinian guerrilla attack on an Israeli town.
Hezbollah leader Sayyed Hassan Nasrallah made a rare public appearance to greet the five prisoners.
Mr Nasrallah, whose movements are kept to a minimum for security reasons, attended a rally in Beirut to celebrate their release.
'The period of defeat is over and the time of victory has arrived,' Mr Nasrallah told a cheering crowd of tens of thousands of supporters.
Hezbollah's Safa said Israel had later handed over via the ICRC the bodies of eight Hezbollah fighters slain in the 2006 war, and those of four Palestinians, including Dalal Mughrabi, a woman guerrilla who led a bloody 1978 raid on Israel.
The four were among the nearly 200 Arabs killed trying to attack Israel whose bodies are to be transferred to Lebanon as part of the exchange. Hezbollah will return the remains of Israeli soldiers killed in south Lebanon.
The deal also calls for Israel to release scores of Palestinian prisoners at a later date as a gesture to UN Secretary-General Ban Ki-moon.
The UN-brokered swap, which was given final approval by the Israeli cabinet yesterday, is the eighth between Israel and Hezbollah since 1991.
