Israeli sources reported that German security officials are expected in
Beirut this week in an attempt to mediate between Hezbollah and Israel
on a prisoner swap deal. Israeli online daily Haaretz reported that a
senior Lebanese official, talking to Al Safir Lebanese newspaper that
“Germany has already made overtures to Lebanon on the issue of acting
as an arbitrator”.

Meanwhile, Mohammad Fneish, a Hezbollah member of the Lebanese cabinet said on Wednesday that there will be no unconditional release of the two Israeli soldiers abducted by Hezbollah fighters on July 12. The two Israeli soldiers who were abducted were identified as Ehud Goldwasser and Eldad Regev.

“There will be no unconditional release of the two soldiers”,  Fneish,  Minister of Energy and Hydraulic Resources said, “This is an impossible issue”.

Fneish was talking to reporters in Beirut, he is one of two Hezbollah cabinet ministers. He said that there should be a prisoners swap deal through indirect negotiations. 

During his Wednesday visit to Israeli, UN Secretary-General Kofi Annan said after meeting with Israel's Prime Minister Ehud Olmert that he believes that the two abducted soldiers are still alive. He added that he will do everything to secure their release.

The statements of Annan came just hours after the U.S. rights activist Jesse Jackson said that he had been informed that the the three were alive. Annan said that he is not in a position to confirm Jackson's statements but   confirmed that he discussed the issue on the highest levels in Lebanon, and met with several cabinet members including a Hezbollah member of the Lebanese cabinet and got the impression that the soldiers are alive.
Moreover, Jackson said that a Hamas leader in Gaza told him on Monday night that the Israeli soldier, Gilad Shalit, who was captured by Palestinian resistance fighters in Gaza on June 25 is alive too.