AN unprecedented exchange of prisoners and corpses yesterday between Israel and the pro Iranian Hizbullah group in Lebanon has raised hopes of a wider ranging deal to bring peace to Israel's northern border.
In a complicated exchange that took months to negotiate - involving German mediation between Beirut, Damascus, Tehran and Tel Aviv - the bodies of two Israeli soldiers were handed over to Israel by Hizbullah yesterday and the group also freed 17 prisoners from the Israeli backed South Lebanon Army.
In return, Israel dug up and returned the corpses of 141 Hizbullah fighters killed in the past decade and a half of bitter clashes, and ordered the release of 45 Hizbullah prisoners from the SLA run Khiam Jail in south Lebanon.
The Iranian funded and inspired Hizbullah has been fighting a 14 year battle to force Israel out of the "security zone" it maintains inside south Lebanon. But while Israel's previous Labour led governments worked to find a solution for Lebanon within the context of a grand peace deal with Syria, the new government, under Mr Benjamin Netanyahu, has signalled a readiness for a more limited accommodation involving an Israeli pull out from the zone in return for satisfactory guarantees of border security.
Yesterday's exchange, Israeli sources said last night, demonstrated that there was scope for Israeli Hizbullah understanding and that an eventual border deal might not be out of the question.
"It is hard to envisage matters returning to the previous norm of Hizbullah gunmen hitting Israeli targets, and Israel responding with raids on Hizbullah bases now that a deal like this has been successfully accomplished", said one Israeli source, whose assessment may be overly optimistic but whose tone indicated a fatal change in Israeli thinking.
Mr Netanyahu himself said he hoped the deal "signals a change of attitude on the part of Hizullah", and took pains to stress that Israel has "no territorial claims whatsoever in Lebanon."
The complicated exchange had been on the cards for months. Indeed, Mr Shimon Peres, who lost the Israeli elections in May, had hoped to bring home the bodies of the two Israeli soldiers - Yossi Fink and Rahamim Alsheikh - shortly before polling day, to boost his chances.
Instead, it was his successor, Mr Netanyahu, who reaped the political benefit of the exchange, and who vowed yesterday to continue negotiations to bring back four other missing Israeli soldiers - three who disappeared during the Lebanon War of 1982 and are believed dead, and one, Ron Arad, an air force navigator shot down over Lebanon in 1986, who Israel believes is still alive.
Yossi Fink and Rahamim Alsheikh, who are to be finally laid to rest in Israeli soil today, were captured in a Hizbullah ambush on the edge of the security zone in February, 1986. They were both apparently badly injured when the red Mercedes in which they were travelling came under heavy gunfire, and were dragged away from the scene to a waiting vehicle and reportedly driven to Beirut.
Within a day, Hizbullah had announced that one of the two was dead, but it was only in 1991 that the Israeli government received firm enough information to classify them both as deceased.
While Alsheikh was a native Israeli, Fink was born in England and brought to Israel at the age of two when his parents immigrated. After he was taken captive, Mordechai and Hadassah Fink made extraordinary efforts to find details of their son's fate, travelling widely and contacting diplomats and journalists who they thought might have access to information.
Proof that the exchange was going ahead was evident in recent days, when Israeli soldiers began digging up Hizbullah corpses from a special "enemies' graveyard" in the north of the country. The bodies were exhumed from their numbered graves in white bodybags, and placed in simple wooden coffins ready for the handover.
The exchange was mediated and supervised by Mr Bernd Schmidbauer, an intelligence adviser to the German Chancellor, Dr Helmut Kohl. It took three months to complete, having begun with contacts between Mr Schmidbauer and the Iranian Information Minister, Mr Ali Fallahiyan.
Initially, Israel had insisted that a deal encompass all its missing soldiers. Similarly, Iran and Hizbullah wanted the release of all Hizbullah captives including Sheikh Abdul Karim Obeid and Sheikh Mustafa Dirani, kidnapped from Lebanon by Israel as possible bargaining chips in 1989 and 1994 respectively.
Gradually, both sides moderated their demands - with a personal phone call from Dr Kohl to President Hashemi Rafsanjani of Iran apparently breaking the deadlock at one point - and yesterday's deal left the two sheikhs in Israeli hands, and Israel no wiser on the fate of its other missing soldiers.
David Horovitz is managing editor of the Jerusalem Report.