Israel Thursday began laying to rest the two soldiers whose bodies were returned a day earlier as part of a prisoner exchange deal with the Lebanese militant Shiite Hezbollah group.

Eldad Regev and Ehud (Udi) Goldwasser were abducted in a cross-border Hezbollah raid on July 12 2006. The attack sparked a month-long war between Israel and Hezbollah. Their fate remained unknown until Hezbollah officials produced two black coffins at the handover on Israel's border with Lebanon.

A military funeral service for Goldwasser was being held at a military cemetry in his home town of Nahariya on the country's northern coast at 10 am (0700 GMT). Senior officials from the government and the military were in attendance.

Regev was to be buried in Haifa at 2 pm (1100 GMT). Thousands were expected to attend the services.

At the time of the Hezbollah raid, Regev was 25-years-old and a staff sergeant in the reserves of the Givati infantry brigade. Goldwasser was 30-years-old and a sergeant-major in the reserves of the same unit.