The funerals of two Israeli soldiers have taken place a day after their bodies were returned as part of a prisoner swap deal with the Hezbollah militant group.

Families and friends of Eldad Regev and Ehud Goldwasser gathered with Israeli leaders at the Shraga military base in northern Israel to pay their respects to their loved ones.

In exchange for the men's remains, Israel freed Lebanese militant Samir Qantar and four other Hezbollah prisoners.

As the two coffins were flanked by a military honour guard, Israeli Prime Minister Ehud Olmert and Defence Minister Ehud Barak paid their respects and comforted the bereaved families.

A military rabbi chanted psalms next to the coffins overnight before they were taken to military cemeteries for burial.

The soldiers were given posthumous promotions.

Their abduction by Hezbollah in a July 12, 2006, cross-border raid led to the 34-day war with Israel.

The conflict left more than 1,200 dead in Lebanon, mostly civilians, and about 160 Israelis, mostly soldiers.

The swap - mediated by a UN-appointed German official who shuttled between the sides for 18 months - is likely to provide a significant boost to Hezbollah, which is trying to rebuild a reputation tarnished when it turned its guns on fellow Lebanese in May.

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