STOCKHOLM - Lebanese Prime Minister Fuad Siniora on Thursday said his government had not been in contact with Israel over the release of two Israeli soldiers kidnapped by Hezbollah on July 12.

"We do not have direct or indirect relations with the Israeli government," Siniora responded when asked about an Israeli army radio report that the Jewish state was ready to negotiate with the Lebanese government over the soldiers' release.

"We do not have any" negotiations, he told reporters on the sidelines of a donors conference in Stockholm for Lebanon's immediate reconstruction.

When asked the same question earlier in the day, Siniora had been more vague.

"The matter is being looked after. Nothing has materialized so far," he said then.

A senior Israeli official on Thursday told Israeli army radio that the Israel was ready to negotiate with the Lebanese government for the release of the soldiers, whose kidnapping sparked a month-long war.

The unnamed official said Israel would not hold talks on a prisoner swap with Hezbollah, so that the Shiite militia could not claim victory in the offensive.

Hezbollah seized Ehud Goldwasser and Eldad Regev in cross-border raids that left eight other servicemen dead and led Israel to launch a massive offensive in Lebanon.

The war ended with a UN-brokered ceasefire on August 14.

The Shiite militant group has demanded the release of Arab prisoners in exchange for the two soldiers. Although Israeli officials have insisted on an unconditional release, local media have reported that talks over an exchange were underway.

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