Government ministers on Tuesday approved the ransom agreement reached with the Lebanese Hizbullah terrorist organization for the return of kidnapped IDF soldiers Ehud Goldwasser and Eldad Regev.

While officially confirming the deal, the Prime Minister's Office announced that the cabinet rejected the report provided by the terrorists regarding IAF navigator Ron Arad, MIA since 1986: "The Cabinet accepts the opinion of the Council of Intelligence Chiefs (composed of the chiefs of the Israel Security Agency, Mossad, and IDF Military Intelligence) regarding the reliability of the report passed on by the Hizbullah organization regarding the fate of missing navigator Ron Arad, and has decided to reject the report, including its evidence and conclusions."

The Cabinet decided that the report did not fulfill Hizbullah's obligations to provide reliable information regarding the captive airman's fate, as per the agreement. The provision of reliable information was cited in the original deal as a necessary precondition for the exchange to take place.

The government of Israel thanked United Nations-appointed German mediator Gerhard Konrad for his efforts in securing the deal.

Ministers Zeev Boim, Daniel Friedman and Ronnie Bar-On voted against the deal. The opposition cited the inconclusive Hizbullah report on missing IAF navigator Ron Arad, the consistent objections voiced by Israeli intelligence services and the impact the exchange will have on negotiations with the Palestinian Authority for the release of IDF Cpl. Gilad Shalit.

Preparations for the exchange began even before the vote, with the transfer of four Lebanese terrorist prisoners to a holding cell at the Hadarim Prison and the exhumation of 190 enemy bodies buried in Israel. The northern town of Rosh Hanikra has been declared a closed military zone and Red Cross officials are to meet today with the Hizbullah prisoners, to ascertain their health and to ask if they have any reason not to return to Lebanon.

President Shimon Peres is to sign the pardons for the five imprisoned Hizbullah terrorists, including child killer Samir Kuntar, which will allow them to be released on Wednesday. He will reportedly condition his signature on Hizbullah carrying out its side of the deal. The Hizbullah report on missing Israel Air Force navigator Ron Arad, delivered last week as part of the exchange, will be presented to President Shimon Peres today. He will also hear from military commanders regarding their evaluation of the agreement.

His hand will tremble as he signs the pardons, Peres said, but "we have a moral obligation to bring home whoever we can."

Prime Minister Ehud Olmert told United Nations Secretary-General Ban Ki-Moon on Monday that Hizbullah has not provided enough information on the fate of Ron Arad. Despite his statement that the Arad report is "unsatisfactory," Olmert called for the cabinet to approve the ransom agreement.

Minister Eli Yishai said on Tuesday morning that Israel is only expecting to receive dead bodies, but that even respect for the dead requires an effort on Israel's part to retrieve the missing soldiers. Lebanese newspaper Al-Akhbar reported that one of the IDF soldiers is dead, killed at the time of the kidnapping, and the other was wounded. It did not give specific information as to the current condition of the second soldier.

The Lebanese government and Hizbullah, meanwhile, are making their own preparations. A state ceremony is planned at the Beirut airport, while Hizbullah intends to stage large a public celebration near the Lebanese border, across from Rosh Hanikra. Pictures of assassinated Hizbullah second-in-command Imad Mughniyeh will frame the event. Flags and victory photos have been posted on the Lebanese coastal highway.