Samir Kantar, one of Lebanon's most notorious militants, has been freed by Israel as part of a controversial prisoner swap which saw the dead bodies of two kidnapped soldiers returned to the Jewish State this morning.

Kantar and four other Islamists crossed into Lebanon at around 5.30pm local time, hours after Hezbollah handed back two black coffins containing the remains of Ehud Goldwasser and Eldad Regev, both Israeli reservists.

The soldiers' kidnapping at the hands of Hezbollah, in summer 2006, led to the second Lebanon War, which lasted a month and left 1,200 people dead. They will be buried on Thursday.

Kantar, meanwhile, had been held in an Israeli prison for almost 30 years for the 1979 murder of a father and his daughter, which has become etched onto the Israeli public consciousness.

The prisoner-swap, which took place after painstaking negotiations with German mediation, was greeted with vastly different reactions in Israel and Lebanon.

Israel was today in a state of mourning over the death of its soldiers. Although Ehud Olmert, the Prime Minister, had publicly said he believed they were dead, that had not been officially confirmed until their coffins arrived at the border this morning. Wellwishers, friends and family members gathered near the family's home to pay their respects and light candles in memory of the dead soldiers.

Lebanon, however, was celebrating the return of Kantar, along with 199 Lebanese and Palestinian guerrillas killed in clashes between the two countries, whose remains were handed over by Israel today as part of the deal.

A red carpet ceremony was this afternoon taking place in the town of Naqura, where patriotic songs and excerpts of speeches by Hezbollah chief Hassan Nasrallah bellowed from loudspeakers and roads were festooned with celebratory banners.

"Today Lebanon witnesses an unprecedented victory over Israel," proclaimed Lebanon’s Ad-Diyar newspaper. "Today the Lebanese prisoners return to their country with their heads held high."

In contrast, Israel’s Jerusalem Post daily newspaper described the festivities in Lebanon as"a celebration of evil."

The prisoner-swap has sparked a debate within Israel over the price it is willing to pay for returning kidnapped soldiers.

Critics claim that, by trading bodies for prisoners, Israel is giving militants little incentive to keep captured soldiers alive. This is particularly relevant as it applies to a continuing hostage-taking in the Gaza Strip, where Palestinian militants are holding a third Israeli soldier, Gilad Shalit, also seized two years ago but believed to be still alive.

The debate is sharpened because of the nature of Kantar's attack, which took place in the dead of night on April 22, 1979. During the raid, regarded as one of the most vicious ever directed at Israeli civilians, he shot Danny Haran in front of his child, then killed her by smashing her skull against a rock with his rifle butt.

Mr Haran's wife, Smadar, accidentally smothered her two-year-old daughter with her hand while trying to stifle her cries. Kantar has never expressed remorse over the incident.

Israel has long refused to free him, holding him as a bargaining chip to win new information about Ron Arad, an Israeli airman whose plane crashed in Lebanon in 1986.

But, despairing of wresting new information about his fate from Hezbollah, and under pressure from the captured soldiers' families to bring them home, Israel's Cabinet voted yesterday to release him in exchange for the bodies of the two captured soldiers.

Crossing over the border today along with Kantar were four other militants, Khaled Zidan, Maher Kurani, Mohammed Sarur and Hussein Suleiman. They were the last remaining Lebanese prisoners in Israeli jails.

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