DATE=11/9/2003

TYPE=CORRESPONDENT REPORT

TITLE=ISRAEL/LEBANON (S-UPDATE)

NUMBER=2-309620

BYLINE=ROSS DUNN

DATELINE=JERUSALEM

CONTENT=

VOICED AT:

INTRO: Israel's cabinet has narrowly approved a controversial exchange of prisoners with the militant Islamic group Hezbollah in Lebanon. Ross Dunn reports from Jerusalem.

TEXT: The Israeli cabinet voted, 12 for to 11 against, to accept Hezbollah's demand to release hundreds of Lebanese and Palestinian prisoners to secure the life of just one man.

Israeli Prime Minister Ariel Sharon staked his prestige on the deal to ensure the return of Israeli businessman Elhanan Tannenbaum, who was kidnapped by the Hezbollah three-years ago.

As part of the deal, arranged with the help of German mediators, Israel will also receive the bodies of three of its soldiers who were kidnapped and killed by the Hezbollah.

Israeli ministers said they were presented with one of the most difficult issues of their careers - to bargain with a Lebanese group that has sworn to destroy Israel and is also listed as a terrorist organization by the State Department.

Mr. Sharon told the cabinet that there was no choice but to accept the deal because a refusal would have resulted in the Hezbollah's executing Mr. Tannenbaum. (SIGNED)

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