The bodies of nearly 200 fighters were released by Israel in the exchange [AFP]

The remains of the Arab fighters passed through the border town of Naqura on Thursday, a day after Israel exchanged them along with five prisoners for the bodies of two Israeli soldiers held by Hezbollah.

As the bodies, most of which are yet to be identified, were being transported to the Lebanese capital, thousands of people attended funerals for Ehud Goldwasser and Eldad Regev, the Israeli soldiers.

Controversial handover

The Lebanese prisoners released by Israel as part of the exchange deal with Hezbollah have received a heroes' welcome on returning home.

One of the five men handed over by Israel is Samir Kuntar, a Lebanese Druze who was jailed in 1979 for three murders in Israel.

Kuntar returned to his home town of Abeih on Thursday, where Druze politicians on both sides of the political divide greeted him.

Nasrallah, right, hailed the return of Kuntar to Lebanon [AFP]

The four other Lebanese released in the exchange deal were captured by Israel during its war against Hezbollah in 2006.

Goldwasser and Regev were captured in a cross-border raid by Hezbollah, which sparked the 34-day conflict.

The five free men were greeted by Hassan Nasrallah, Hezbollah's leader, at a mass rally held in their honour in south Beirut.

After hugging and kissing each of the former prisoners, Nasrallah addressed the tens of thousands of people in the crowd, many of them waving the yellow-and-green flag of the movement, hailing the "victory".

"This people and this nation and this country that gave a clear picture to the world ... cannot be defeated," he said.

Nasrallah's appearance was the first time he had been seen in public since January. Kuntar, dressed in military fatigues, also spoke at the rally.

Israelis sombre

A ceremony for the dead Israeli soldiers was held at a military base [AFP]

In contrast to the upbeat mood in Lebanon, the scene across the border in Israel was sombre.

Miri Eisin, a former aide to Olmert, said Israel found the release of Kuntar an "incredibly difficult decision".

"Today in Israel we are mainly reflecting on the price we pay in our country to defend our borders," she said.

The decision to release Kuntar was particularly controversial.

He had been held in an Israeli jail since 1979 after being found guilty of murdering three Israelis, one of them a four-year-old girl, in a raid in Nahariya earlier that year.

Kuntar's family says that he did not commit any of the murders and that the Israelis were killed during a shootout with Israeli security forces trying to apprehend Kuntar and other members of his group.

The capture of Regev and Goldwasser meant that Hezbollah could bargain for Kuntar's release.

Israel's attempt to secure the release of their soldiers during the war that followed was unsuccessful.

Robert Fisk, a Middle East expert and journalist with The Independent newspaper, told Al Jazeera of the exchange: "It's regarded as being the final chapter of the 2006 war.

"The Israelis certainly lost that war, they did not get their prisoners back - not until now and they're getting them back dead. So more than 1,000 Lebanese civilians and more than 160 Israelis, most of them soldiers, all died for absolutely nothing and that's what [these] prisoner exchanges prove."

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