Jerusalem ? The Israeli government agreed Sunday to free a Lebanese gunman convicted in one of the grisliest attacks in the country’s history in exchange for the bodies of two Israeli soldiers killed by Hezbollah guerrillas.

The German-mediated deal was a rare political victory for embattled Prime Minister Ehud Olmert and closed a chapter from Israel’s inconclusive war against the Lebanese militant group two years ago.

But critics warned that the deal’s heavy price for Israel could offer militant groups an even greater incentive to kill captive soldiers. In Lebanon Sunday, Hezbollah declared victory and planned celebrations.