Israel is to set free more than 400 Arabs and Palestinians next week under a prisoner exchange deal with the militant Lebanese group, Hezbollah. In return, the Hezbollah will hand over a kidnapped Israeli businessman and the bodies of three Israeli soldiers.
Under the deal, Israel is to release 35 prisoners from various Arab countries, including Lebanon, along with some 400 Palestinians.
The Arab prisoners include top Lebanese figures, Abdel Karim Obeid and Mustafa Dirani, two guerilla leaders kidnapped by Israel from southern Lebanon.
For its part, Hezbollah, which is listed by the State Department as a terrorist organization, will free Israeli businessman, Elhanan Tannenbaum and the bodies of three soldiers. All were kidnapped by the Hezbollah in October 2000.
Israeli Prime Minister Ariel Sharon issued a formal statement late Saturday confirming that the deal had been finalized, following months of negotiations.
His statement expressed gratitude to the German government mediators who helped broker the agreement.
German officials say the prisoner swap will be completed within the next week.
The Hezbollah is also pressing for the release of Samir Kantar, a Lebanese man, who has been held in an Israeli prison since 1979 for the killing of three members of an Israeli family.
Mr. Sharon's office says that Mr. Kantar will only be set free if information is provided on the whereabouts of Israeli airman, Captain Ron Arad. He was shot down over Lebanon in 1986.
It is known he was held captive in Lebanon for more than a year but his fate after that period remains unknown. His relatives claim he is still alive and the Israeli military has not declared him dead.
Israeli media has speculated that Mr. Arad may have been sold to Iran but Teheran has repeatedly denied all such claims.