Hezbollah on Sunday night admitted it would not have captured the two Israeli soldiers last month had it known a war would follow.
The leader of the militia also said that talks were going on to return the two in exchange for Lebanese prisoners held by Israel.
The Israeli government refused to confirm this, although officials have said privately that a prisoner exchange was probably the only way forward.
Hezbollah crossed into north Israel early on July 12 and captured Ehud Goldwasser and Eldad Regev. Eight other Israeli soldiers were killed, and within hours Israel and Hezbollah were plunged into their most serious conflict.
By the time of the ceasefire 34 days later, more than 1,100 people were dead in Lebanon and 157 in Israel, mostly soldiers.
"We did not think, even 1 percent, that the capture would lead to a war at this time and of this magnitude," Hassan Nasrallah, the cleric who leads Hezbollah, told Lebanon's New TV channel.
"You ask me, if I had known on July 11 ... that the operation would lead to such a war, would I do it? I say no, absolutely not," he said.
He said Italy would play a part in negotiating the soldiers' eventual release.
"Contacts recently began for negotiations," he said. "It seems that Italy is trying to get into the subject."
From the start, Nasrallah has said he wanted to exchange the soldiers for Lebanese and Palestinians held in Israel.
Sergio de Gregorio, head of Italy's Senate defense committee, said that Iran, Hezbollah's backer, wanted Italy involved.
Nasrallah also said he did not expect a renewed conflict, even though many others are worried about the ceasefire lasting.
"We are not heading to a second round," he said.
In Berlin yesterday, Israeli Foreign Minister Tzipi Livni said a resolution of the Lebanon conflict must include the release of Goldwasser and Regev.
The July 12 kidnapping ``was the start of this entire matter,'' Livni said after meeting with German Foreign Minister Frank-Walter Steinmeier.
``From our side, so long as this issue with the two soldiers is not solved, the whole thing is of little significance. Our sovereignty has been infringed and if this resolution does not make that good, then we still have this problem.''
Meanwhile, UN Secretary-General Kofi Annan arrived in Beirut yesterday at the start of a Middle East tour to strengthen the ceasefire in Lebanon, saying it was "a very critical time" for the country.
"I think it's important that I come here myself to discuss with the Lebanese authorities the aftermath of the war and the measures we need to take to implement UN Security Council Resolution 1701 and to underscore international solidarity," Annan told reporters after being met at the airport by Lebanese Foreign Minister Fawzi Salloukh.
During his two-day stay, Annan will meet with Lebanese leaders and visit with UN peacekeepers.
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