BEIRUT, Lebanon -- Israel and Hezbollah will exchange prisoners in a two-stage deal in which the militant Lebanese group promises to obtain information about Israel's most famous missing serviceman and Israel releases Lebanon's longest-held prisoner within three months, the Hezbollah leader said Sunday.
The deal begins with an exchange of prisoners and human remains Thursday and Friday, and will proceed to the case of missing Israeli airman Ron Arad and negotiations for the release of more prisoners, Hezbollah's leader, Sheik Hassan Nasrallah, told a news conference.
"After Thursday and Friday, there will be no Lebanese prisoners in Israeli jails," Nasrallah said. "But the door is still open and the second stage will be very important, especially for the Palestinians."
He spoke a day after the deal, negotiated with German help, was announced.
After releasing 400 Palestinian prisoners to the West Bank and Gaza Strip, Israel will bring 23 Lebanese prisoners and 12 prisoners from other Arab countries to Munich where the swap will take place, the officials said.
Nasrallah said the Palestinians would include members of Hamas and Islamic Jihad, the groups responsible for most of the suicide bombings in Israel.
It will be Israel's most significant release of Palestinian prisoners since Ariel Sharon became prime minister in 2001.
The remains of 59 Lebanese killed in battle also will be handed to Lebanese authorities at a border crossing in south Lebanon, Nasrallah said.
Hezbollah has promised to free Israeli businessman Elhanan Tannenbaum and three Israeli soldiers -- all captured by the guerrilla group in October 2000.
Tannenbaum is known to be alive. But Nasrallah refused to say whether the three Israeli soldiers were dead or alive. The world will find out Thursday, he said.
Hezbollah guerrillas captured the three soldiers after a shootout on the Lebanese-Israeli border in which the troops were wounded. Israel has declared Adi Avitan, Beni Avraham and Omar Sawaid to be dead.
In the deal's second stage, Nasrallah said a committee will be formed to seek information on Arad and four Iranian diplomats who disappeared in Lebanon in 1982 during the Israeli invasion.
"Any positive development in the case of Ron Arad will open the way for the release of more Palestinians and Arabs," Nasrallah said.
In Jerusalem on Sunday, Prime Minister Sharon said he had been assured Hezbollah would make every effort to find out what happened to Arad, who was captured after his plane was shot down in 1986.
"A system was decided on in which all the relevant sides will cooperate fully until we discover the fate of Ron Arad and he returns home -- something we all hope will happen in the near future," Sharon told his Cabinet.
Arad contacted his family in the first two years of his capture, but nothing was heard after 1988.
Nasrallah said further talks are also planned to secure the release of Lebanon's longest-held prisoner in Israel, Samir Kantar.
Kantar has been in an Israeli prison since 1979 for killing three members of an Israeli family during a Palestinian militant raid into northern Israel. Kantar, who belonged to the Palestine Liberation Front, is serving a 542-year sentence.
"Samir Kantar will be released as soon as the negotiations are finished within two or three months," Nasrallah said.
Kantar's release has been a key Hezbollah demand, and Israel is believed to have regarded him as a bargaining chip for information on airman Arad.
An Israeli official said Kantar's release depended on information about Arad.
"If, through the negotiations, Israel is provided with real evidence on Ron Arad, meaning a tangible sign of life or DNA/pathological evidence if he is dead, then Israel will release Samir Kantar only -- not any other Arab prisoners," the official, who spoke on condition of anonymity, told reporters after Sunday's Cabinet meeting.
Another phase of talks could then be opened for the release of more Arab prisoners, the official said.
Asked whether his October threat still stood to capture more Israeli soldiers if the swap negotiations failed, Nasrallah smiled and answered: "Yes, yes."
Israel and the United States regard Hezbollah as a terrorist group. Lebanese view it as the group that led a guerrilla war against Israel's 18-year occupation of an enclave in southern Lebanon.
Lebanese President Emile Lahoud said in a statement that the prisoner swap, "constitutes a frank recognition by Israel that the resistance of Hezbollah is legitimate and not a foreign terrorist movement as it claims."