The government is adopting a wait-and-see approach to reports that Hizbullah has rejected the terms of a proposed prisoner swap that were narrowly approved by the cabinet last week.

The Lebanese daily Al-Mustaqbal reported on Monday that German mediators had met with Hizbullah leader Sheikh Hassan Nasrallah and other senior officials and informed them of Israel´s decision.

It said Nasrallah rejected the proposals because the list of some 400 Lebanese, Palestinians, Jordanians, Syrians, and others to be released did not include Samir Kuntar.

Israel has stated it will not free those with blood on their hands such as Kuntar, a Lebanese Druse who headed a Palestinian terrorist squad that infiltrated Nahariya in 1979 and was responsible for the deaths of Danny Hanan, his two daughters Einat, four, and Yael, two, and policeman Eliahu Shahar.

Afterward, however, there were reports that negotiations would continue in an effort to resolve "outstanding issues." According to these reports, apparently based on a statement issued by Nasrallah, Hizbullah and the mediators agreed to keep the negotiations secret at this stage and thereby increase prospects of reaching a successful conclusion.

Even the negative report in Al-Mustaqbal, which is owned by Lebanese Prime Minister Rafik Hariri, said that Hizbullah had not entirely rejected Israel´s conditions.

Under the proposed terms, Hizbullah would return businessman Elhanan Tannenbaum, who was abducted while on a trip abroad in October 2000, and the bodies of St.-Sgts. Benny Avraham, Omar Sawayid, and Adi Avitan, who were kidnapped shortly before in an Hizbullah ambush in the Mount Dov region.

IAF navigator Lt.-Col. Ron Arad, who has been missing since ejecting from his plane over Lebanon in October 1986, is excluded from the proposed deal. His family is trying to prevent the release of Mustafa Dirani, who, as Amal security chief, allegedly tortured Arad before selling him to Iran.

There was no official response to the various reports from Lebanon, although government sources noted that it was important to hear directly from the German mediator This did not stop some politicians from speaking out, with Justice Minister Yosef Lapid and Education Minister Limor Livnat, both being quoted by Army Radio as saying that Israel would never agree to the release of Kuntar or bow to Hizbullah dictates. (© 1995-2003, The Jerusalem Post 11/18/03)