The secretive negotiations are designed to secure the release of two Israeli soldiers, whose capture in a cross-border raid on July 12 last year ignited a 34-day war between Israel and Hezbollah, in return for Lebanese and Arab prisoners.

Hezbollah chief Sayyed Hassan Nasrallah announced in November that indirect talks, through a U.N.-appointed German negotiator, had begun to broker an exchange deal.

Very little have been heard on the talks since. Israel says the soldiers were seriously wounded when they were seized and Hezbollah has refused to say whether the men were dead or alive.

"The captives, we are negotiating and the negotiations are underway to liberate them," Nasrallah told a large crowd attending the annual Shi'ite Ashura religious ceremony in Beirut's southern suburb.

Nasrallah, who had claimed the war was a divine victory for Hezbollah, reiterated that Hezbollah's will to fight Israel would never be weakened.

"I stress that the resistance is ready... and those who think that the resistance have been weakened or it's now in despair or tired, those are delusional," he said to chants of "death to Israel". -Reuters