US Secretary of State Condoleezza Rice criticised Israeli settlement activity in exceptionally harsh language yesterday, saying new construction projects on disputed land has a “negative effect” on Mideast peace talks.

Israeli prime minister Ehud Olmert has concluded that Israel should exchange the perpetrator of a particularly serious terror attack for two Israeli soldiers held in Lebanon for the past two years, a senior government official confirmed today.

ISRAEL yesterday released the names of prisoners to be freed in a swap with Lebanese Hezbollah guerrillas, after soldiers started exhuming the bodies of Lebanese fighters to be returned as part of the deal.

Israel today released the names of prisoners to be freed in a swap with Lebanese Hezbollah guerrillas, after soldiers started exhuming the bodies of Lebanese fighters to be returned as part of the deal.

ISRAELI soldiers yesterday began digging up 59 bodies of Lebanese militants buried in a small plot in northern Israel, a first step toward a prisoner swap with the Hezbollah guerrilla group take place this week

Israel and Hezbollah have agreed to a two-stage prisoner exchange, it was announced today.

Hezbollah’s leader today pledged to bring home all prisoners held by Israel and said he expected to hear from a German mediator in the next three days on the proposed swap of prisoners and bodies with the Jewish state.