BEIRUT, Lebanon - Hezbollah leader Sheik Hassan Nasrallah announced Monday that U.N.-mediated negotiations for a prisoner swap with Israel were continuing despite the recent assassination of a top militant commander blamed on the Jewish state.

Nasrallah spoke at the end of the 40-day mourning period for Imad Mughniyeh, who was killed by a car bomb in Damascus.

"Although the Israelis have killed the pillar of the resistance, we did not halt the negotiations on a prisoner exchange," he said, saying that meetings were recently held with U.N. mediators.

"We will not stop the negotiations ... because we want to achieve one of the aspirations of martyr Imad Mughniyeh, that is, to see our prisoner brothers free among their parents and loved ones," Nasrallah said.

Amos Gilad, a senior Israeli Defense Ministry official, declined to comment on Nasrallah's remarks.

"The less we say about prisoner exchange the better," he said.

In addition to the two Israeli soldiers whose capture by Hezbollah in July 2006 triggered a summer war between Israel and Hezbollah, Nasrallah said in January his group had the remains of other soldiers killed in the fighting.

There are believed to be seven Lebanese prisoners in Israeli custody.

Nasrallah also said he doubted that there would be any new attacks on Lebanon or Syria due to his group's increased capabilities and Israel's diminished stature following its "defeat" in the 2006 summer war.

"I want to remind you that an Israeli war is no longer a picnic. An Israeli war has become very costly because in Lebanon there is the strength, will and education of the resistance," he said.

Earlier this month, U.N. Secretary-General Ban Ki-moon told the Security Council in a report that, according to Israel, Hezbollah is rearming and has an arsenal including 10,000 long-range rockets and 20,000 short-range rockets in southern Lebanon.

The bearded Nasrallah spoke in a videotaped message broadcast over a giant screen at the ceremony in a Hezbollah stronghold. Nasrallah went into hiding in 2006, fearing an Israeli assassination, making only three appearances since. -AP