updated 5/6/2007 11:34:43 PM ET 2007-05-07T03:34:43

Hezbollah leader Hassan Nasrallah said Sunday there has been progress in negotiations to free two Israeli soldiers whose abduction by the militant group sparked a 34-day war in Lebanon last summer.

Speaking in an interview with Iranian state television’s Arabic-language station, Al-Alam, Nasrallah also rejected U.N. Security Council intervention to create an international tribunal in the assassination of former Lebanese Prime Minister Rafik Hariri, saying it must first receive the politically divided country’s approval.

Last month, Nasrallah’s deputy said there were “serious” U.N.-mediated negotiations to secure a prisoner swap involving the captive Israeli soldiers. But so far there have been no results.

“It is on the way to be solved,” Nasrallah said in the interview. “It’s just a matter of time.”

Israel and Hezbollah have swapped prisoners in the past. But Hezbollah, which is backed by Syria and Iran, has refused to release the two Israelis without a deal to exchange them for Arab prisoners held by Israel.

The July 12-Aug. 14 war between Hezbollah and Israel erupted when guerrillas crossed the international border, killing three Israeli soldiers and capturing two. Israel responded with a massive bombardment of Lebanon and a ground offensive, and Hezbollah lobbed several thousands rockets into Israel.

At least 1,000 Lebanese and 119 Israeli soldiers were killed. In Hezbollah rocket barrages on northern Israel, 39 civilians were killed.

In the interview, Nasrallah also denied that a former an Arab Israeli lawmaker wanted by Israeli authorities for espionage had ever spied for the Hezbollah.

Israeli police said earlier this month that while Israel and Hezbollah battled each other last summer, Azmi Bishara, who has resigned from Israel’s parliament, advised the Shiite Muslim group. They alleged he passed on sensitive information and suggested ways of causing more harm to Israel.

“I categorically and absolutely deny this,” Nasrallah said. “All the accusations about contacts and giving information to Hezbollah are not true.”

Bishara left Israel after being grilled twice by investigators and he has resigned his parliament seat. Police said he would be arrested immediately if he returns to Israel.

Nasrallah quipped that Hezbollah did not need the military information.

“He’s not of use to be an informant,” the Hezbollah chief said.

Warning the U.N.
Bishara, who has appeared on several Arab satellite stations over the years, has antagonized many Jewish Israelis by meeting with some of Israel’s bitterest enemies, including the leaders of Syria and Hezbollah. A Christian from the Israeli town of Nazareth who joined parliament in 1996, he frequently speaks out in favor of Palestinian rights.

Nasrallah also commented on a demand by Lebanon’s anti-Syrian parliamentary majority that the Security Council mandate an international tribunal in the February 2005 assassination of Hariri after the Hezbollah-led opposition balked at approving it. The matter has since been stalled in Parliament.

“We consider that any resolution issued by the Security Council (on the tribunal) illegitimate and illegal and has no value because it violates the Lebanese national interest,” he said.

“We hope that things don’t get there.”

The comments by Nasrallah amounted to a warning to the United Nations that his group could undermine the tribunal if it is created without agreement between the government and the Hezbollah-backed opposition.

The Lebanese opposition, which supports Damascus’ involvement in Lebanese affairs, insists on receiving a veto-wielding share in a new Cabinet before any action on the tribunal.

The U.S. ambassador to the United Nations has warned that if Lebanese parties fail to agree, the Security Council could establish the tribunal under a section of the U.N. Charter that deals with threats to international peace and security. The section, called Chapter 7, authorizes a range of measures from breaking diplomatic and trade relations to military intervention.

A U.N. investigative team has implicated Syrian and pro-Syrian Lebanese intelligence officers in the truck bombing that killed Hariri and 22 other people in Beirut. Syria denied any role, but outrage over the bombing forced Damascus to withdraw its troops from Lebanon two months after Hariri’s death, ending a 29-year presence.

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