NAQURA, Lebanon - Hezbollah handed over two black coffins it said contained two Israeli soldiers captured by Shi'ite guerillas two years ago, at the start of a prisoner swap with Israel today. "Today we hand over Ehud Goldwasser and Eldad Regev,'' Hezbollah official Wafiq Safa said at the Naqura border crossing between Lebanon and Israel. "Despite the war that was waged against us and despite international pressure to reveal the fate of the two Israeli soldiers, no-one has known their fate until this moment.'' The mood in Israel has been sombre as it waited to discover the fate of Goldwasser and Regev, whose capture in a deadly cross-border by Hezbollah fighters in July 2006 triggered a devastating 34-day war in Lebanon. The bodies were handed over to the International Committee of the Red Cross and DNA tests are to be carried out to confirm the identities before Lebanese fighters are handed over in the next phase of the exchange. The family of Goldwasser broke down in tears and cries of despair as they saw the televised images of Hezbollah handing over the two caskets. But in Lebanon, celebratory banners and flags are flying along the main coastal highway from Naqura to Lebanon's southern port city of Sidon and the cabinet has declared today a national holiday. "Lebanon is shedding tears of joy,'' said one banner at the border. "Israel is shedding tears of pain.'' Among those being exchanged is Samir Kantar, a Lebanese Druze who was sentenced to five life terms for a 1979 triple murder that shocked Israel to the core and is the longest-serving Arab prisoner in Israel. Four Hezbollah fighters captured in the July-August 2006 war which killed more than 1,200 people in Lebanon and 160 in Israel -- Khaled Zidan, Maher Kurani, Mohammed Sarur and Hussein Suleiman -- are also to walk free. Many in Israel question whether the nation is paying too high a price for the return of its soldiers, saying the swap risks bolstering its arch-foes in the region. In return for its two soldiers, Israeli is to transfer to Lebanon the remains of 199 Palestinian and Hezbollah fighters exhumed over the past week. The UN-brokered swap, which was given final approval by the Israeli cabinet on Tuesday, is the eighth between Israel and the fundamentalist Shi'ite movement Hezbollah since 1991. Israel's Jerusalem Post newspaper has billed the festivities in Lebanon, where the released men are to be flown to Beirut to be greeted by President Michel Sleiman and Prime Minister Fuad Siniora, as "a celebration of evil.'' The International Committee of the Red Cross -- using trucks ferried in from Jordan -- was organising the exchange, after an accord sealed by a UN-appointed German mediator following months of tough negotiations. Until today, Hezbollah, which is backed by Tehran and Damascus, had never disclosed the fate of Goldwasser and Regev, although Israeli Prime Minister Ehud Olmert said they were dead. The army was preparing for military funerals tomorrow in their home villages once their deaths are confirmed. Hezbollah chief Hassan Nasrallah is to give a speech in Beirut's southern suburbs to hail his group's success in emptying Israeli jails of Lebanese prisoners, who will be greeted by Lebanese Prime Minister Fuad Siniora and President Michel Sleiman on their return to the capital. Shlomo Goldwasser, the father of Ehud, blasted the hero's welcome being prepared in Lebanon for Kantar. "The Lebanese people sacrificed almost 800 soldiers, its entire economy. For what? For the killer of a three-year-old girl? Is that a hero? For me he is nothing more than a little bigot.'' Israeli President Shimon Peres yesterday pardoned the five Lebanese, saying it was "not a happy day for having to free such murderers but we have a moral responsibility to bring our soldiers home''. The cabinet first approved the swap in June, but was asked to endorse it again after Israel received a Hezbollah report on missing airman Ron Arad, whose fate has long been a cause celebre in the Jewish state. Arad has been missing since his plane was shot down over Lebanon in October 1986 during the civil war, and although the report said he was probably dead, Israel has rejected its findings.