Israel says room for Lebanon prisoner swap -source

JERUSALEM, Aug 31 (Reuters) Israel is prepared to discuss freeing Lebanese prisoners for two soldiers held hostage by Hizbollah if the two are handed over to the Lebanese government, a senior Israeli political source said today.

Any negotiations, which would likely take place through a mediator, would be conducted with the Lebanese government and not the Hizbollah guerrilla group, the source said.

The source said Israel's position was conveyed to UN Secretary-General Kofi Annan yesterday. Israel has previously said the two soldiers had to be freed unconditionally.

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