Tel Aviv - Israel is to formally sign the German-brokered agreement with Hezbollah on a prisoner exchange only after it receives a report on missing Israeli navigator Ron Arad, Israeli media reported Tuesday.

Israeli Prime Minister Ehud Olmert's cabinet approved the agreement Monday afternoon, after a six-hour, stormy debate.

Under the agreement, Hezbollah is first to submit a detailed report on the efforts it has made to solve the mystery of Arad, who went missing after his plane was shot down over Lebanon in 1986.

As part of the controversial deal, Israel is to release Lebanese prisoner Samir Kuntar, thus far considered the main bargaining chip for information on Arad. But Hezbollah is said to have no knowledge of his fate.

Kuntar led a 1979 infiltration and hostage-taking into Israel from Lebanon, in which he and his men killed four Israelis, including a father and his four-year-old daughter whom they had taken hostage.

German mediator Gerhard Conrad has vouched that the report will be detailed and "serious" in showing the attempts Hezbollah made to find out Arad's whereabouts.

Arad is thought to have been taken to Iran at one point and to have been killed, possibly in 1988, but this has never been confirmed.

On receiving the report, studying it and finding it "serious," the Israeli government will then release Kuntar within 10 days, Israeli security officials told Israel Radio.

Israel will also free four Hezbollah fighters caught in the July- August 2006 second Lebanon war, as well as the bodies of about 10 others killed in that war.

In return, Hezbollah is to free Eldad Regev and Ehud Goldwasser, two Israeli reserve soldiers whose capture by Hezbollah in a July 12, 2006, cross-border raid sparked the 33-day war.

Olmert told his cabinet Monday that the two soldiers were dead.

The swap is to take place at the Rosh Hanikra crossing, on the coast and on Israel's northern border with Lebanon, under the auspices of the Red Cross.

Israel is then to free between seven and 10 Palestinian prisoners within 30 days of the exchange, as a "goodwill measure for the Palestinian people."

The latter clause is seen as a compromise, with Hezbollah initially demanding the release of scores of Palestinian militants from Israeli prisons. (dpa)