JERUSALEM (AP) - With Israel's prime minister standing by his side, U.N. Secretary- General Kofi Annan renewed his demands Wednesday that Israel immediately lift its sea and air blockade of Lebanon, but failed to win Israel's consent. Annan also said he hoped Israel would withdraw all its forces from south Lebanon once the number of U.N. forces in Lebanon has doubled to 5,000, a number he said could be reached in "coming days and weeks."
However, Israeli Prime Minister Ehud Olmert suggested Israel was not prepared to do that until a U.N.-brokered cease-fire deal that ended 34 days of fighting between Israel and Hezbollah guerrillas was implemented fully.
Under the deal, some 15,000 Lebanese soldiers and up to 15,000 international troops are to be deployed and enforce an arms embargo on Hezbollah. Currently, some 2,500 U.N. observers are monitoring the Israel-Lebanon border, but have a very limited mandate.
Also Wednesday, Lebanese Prime Minister Fuad Saniora said Wednesday that his government would pay $33,000 per house to compensate residents whose homes were destroyed by Israeli attacks.
Saniora said 130,000 housing units had been destroyed or damaged in more than a month of Israeli airstrikes and ground fighting with Hezbollah guerrillas, mostly in south Lebanon. He did not give a breakdown of the completely destroyed houses.
The fighting between Israel and Hezbollah began after two Israeli soldiers were captured by the Islamic militant group. On Wednesday, a Hezbollah cabinet minister said that the guerrilla group will not release the two captured Israeli soldiers unconditionally, and that they would only be freed in a prisoner exchange.
"There will be no unconditional release. This is not possible," Minister of Energy and Hydraulic Resources Mohammed Fneish said in Beirut. He is one of two Hezbollah members in Lebanon's Cabinet.
"There should be an exchange through indirect negotiations. This is the principle to which Hezbollah and the resistance are adhering," he said.
On Tuesday, Annan called the Israeli blockade of Lebanon a "humiliation" and an infringement on Lebanese sovereignty. But Israel has said it would not lift its blockade unless international forces, along with Lebanese troops, are deployed on the Israel-Lebanon border, as well as on Lebanon's frontier with Syria to prevent the flow of weapons to Hezbollah.
Syria has said it would consider the presence of international troops on its border a hostile act and Lebanon has said it would deploy its own forces there, but not let international troops patrol in the area. Annan has backed Lebanon in the dispute and called on "all the neighbors" to cooperate in implementing the cease-fire deal.
The U.N. chief said he won assurances from Lebanese authorities that they are serious about enforcing the arms embargo on Hezbollah, and that he believes Israel's security concerns could be addressed in this way.
"We need to be flexible, because I don't think there's ever only one way of solving a problem. We shouldn't insist that the only way to do it is by deploying international forces," he said.
The lifting of the blockade is necessary to help Lebanon's economy recover from the war and to strengthen Lebanon's government. "I do believe the blockade should be lifted," Annan said in a news conference with Olmert.
Olmert sidestepped the issue, saying only that Israel wants to see a full implementation of the cease-fire.
Annan said he is working to increase the size of the international force in Lebanon "as rapidly as possible" and to double the current number to 5,000 quickly. A five-ship Italian fleet departed on Tuesday carrying 800 soldiers and was expected to arrive in Lebanon on Friday.
"We hope that as we do that, the Israeli withdrawal (from Lebanon) will continue and by the time we are at that level, Israel will have fully withdrawn," Annan said.
Olmert said Israel hoped to pull out from Lebanon "as soon as possible," but suggested the deployment of the 5,000 U.N. troops would not be enough to secure that objective. After meeting with Annan on Tuesday, Israeli Defense Minister Amir Peretz said that "Israel will pull out once there is a reasonable level of forces there." He did not say what that level would be.
Olmert, meanwhile, said he hoped the cease-fire would provide dialogue between Israel and Lebanon.
"I hope the conditions will change rapidly to allow direct contact between the government of Israel and the government of Lebanon to hopefully to reach agreement between the two countries," he said. The deal could be "a cornerstone to build a new reality between Israel and Lebanon."
Israel has long sought a peace deal with Lebanon, but Lebanon has hesitated reaching a separate agreement with Israel as long as Israel's conflicts with the Palestinians and Syria are unresolved.
Both Annan and Olmert demanded the unconditional release of two Israeli soldiers captured by Hezbollah on July 12, the incident that triggered the war. A third Israeli soldier was seized by Palestinian Hamas militants in late June and is being held in Gaza.
Annan said he would do everything in his power to win the release of the three soldiers. He said that in his visit to Lebanon, before coming to Israel, he met with a Hezbollah member of the Lebanese Cabinet and discussed the fate of the soldiers. "I did not get the impression that they are not alive. I believe they are alive," he said.
Israel is the second stop on Annan's 11-day Mideast tour intended to shore up the truce.
