Italy eyed to help free Israelis - Italian senator

ROME, Aug 21 (Reuters) Iran wants Italy to negotiate the release of two Israeli soldiers, who are alive but not in ''great'' condition following their kidnapping by Hizbollah last month, an Italian senator told Reuters today.

Sergio De Gregorio, head of Italy's Senate defence committee, said Iran's national security chief Ali Larijani had told him personally that he would ask Hizbollah, which is backed by Iran and Syria, to negotiate with Italy.

''It appears that they (the soldiers) are in good condition, but not great. They are alive'', De Gregorio told Reuters in an interview. He did not elaborate about the circumstances of the conversation.

The two soldiers, military reservists Eldad Regev and Ehud Goldwasser, were kidnapped on July 12, triggering a 34-day war between Israel and Hizbollah.

''Larijani told me that ... he will ask Hizbollah to negotiate only with the Italians,'' he said.

He said Iran preferred that any hostage negotiations take place with Italy's military intelligence agency, Sismi, or, as a second choice, with Italy's Foreign Minister Massimo D'Alema.

Italy is one of Iran biggest trading partners.

In 2004, Hizbollah swapped a kidnapped Israeli businessman and the bodies of three soldiers for more than 420 Arab prisoners after German mediation.

If confirmed, the negotiating role would put Italy in a privileged position -- especially after Israel's request that Italian forces lead an international peacekeeping force in southern Lebanon.

''Italy has excellent relations with Israel and good relations with Iran, as we are the top trade partner,'' De Gregorio said.

''So it could be a great hinge between Israel and Iran, between Israel and Hizbollah, let's say, even if the spiritual leader of Hizbollah is in Iran.'' REUTERS MS RN2329