Complex negotiations are gathering pace to halt, or at least reduce, years of fighting in south Lebanon between Israel and the pro-Iranian Hizbullah guerrilla movement.
In the latest evidence of the behind-the-scenes contacts, Israel yesterday transferred to Hizbullah, via International Committee of the Red Cross officials at the border, the bodies of two Hizbullah fighters killed in a clash earlier this month.
On Monday, Israel released five alleged Hizbullah fighters who it had been holding in jail for more than a decade. And five other bodies were also returned to Hizbullah last week.
The release of the captives, and the return of the bodies, was mediated via the ICRC and a German government envoy. Publicly, the moves are being described in Israel as goodwill gestures.
But privately, Israeli and other sources acknowledge a deeper purpose: to reduce the level of hostilities in southern Lebanon - which continued as usual yesterday with clashes and an Israeli raid - as Syria and Israel intensify their peace efforts, with the Lebanese government also soon set to join the talks.
The Israeli Prime Minister, Mr Ehud Barak, who will fly off to the next round of talks with the Syrians next week, has been pressing Damascus to intervene to halt the mini-war that has raged in southern Lebanon since the mid-1980s.
Syria maintains a large troop deployment in Lebanon, and Damascus Airport serves as a supply route for Hizbullah weaponry from Iran.
Anxious to persuade the Israeli public of the advantages of a Golan Heights-for-peace deal with Syria, indeed, Mr Barak is said to have urged Damascus to come up with specific "confidence-building measures": to return the body of Israel's spy in Damascus, Eli Cohen, who was hanged there in 1965; to rein in Hizbullah in south Lebanon; and to ascertain the fate of four Israeli soldiers missing in action since the early and mid 1980s.
By returning bodies and freeing five of 21 Lebanese captives it holds, Israel is delivering its part of the bargain.
On Monday, fulfilling their part, Hizbullah officials publicly pledged to try to find information on one of the MiAs, an air-force navigator, Ron Arad.
Hizbullah also honoured a brief ceasefire deal during last week's first transfer of bodies, and it conspicuously refrained from escalating attacks on Israeli targets last week after pro-Israeli forces accidentally shelled a school, badly injuring several children.
Back home, meanwhile, Mr Barak, yesterday resolved a coalition crisis that had seen the Shas party threaten on Monday to bolt his government.
Shas, whose support is important for the passage of budget legislation later this week, and crucial to Mr Barak's majority in any vote on a peace deal with Syria, had sought additional funding for its school system.
Ministers of Shas voted in favour of the first article of Israel's budget for 2000. The article was passed by 66 votes to 34 with eight abstentions in the 120-seat Knesset. Although the Shas ministers approved the article, some of the party's 17 deputies abstained.
Shas, which champions the cause of Sephardic or Oriental Jews, demanded $30 million to keep its financially ailing private school system afloat and an increase of $70 million in the social affairs budget.