Israeli Prime Minister Ehud Olmert (left) meets U.N. Secretary General Kofi Annan in Jerusalem yesterday, in this picture released by the Israeli Government Press Office. - Reuters

JERUSALEM (Reuters):

Israel rejected a call by U.N. Secretary General Kofi Annan yesterday to lift its air and sea blockade of Lebanon, saying it would end the seven-week-old siege only when all aspects of a ceasefire were in place.

Prime Minister Ehud Olmert also told Annan he would not withdraw Israeli troops fully from southern Lebanon until the full implementation of the truce, which took effect on August 14 and ended 34 days of conflict with Hezbollah guerrillas.

Olmert's statements amounted to a rejection of the two main requests Annan had brought to Jerusalem, but Annan later played down the differences of opinion.

"There isn't that much of a difference between Prime Minister Olmert and myself," Annan told a news conference in the West Bank city of Ramallah when asked about his apparent failure to strengthen the ceasefire.

Annan tour

Annan, who visited Lebanon on Monday and Tuesday, later left for Amman, where he will meet King Abdullah of Jordan today. Annan's Middle East tour also includes Syria and Iran.

During an hour of talks with Olmert, Annan said he pressed for a lifting of the blockade, imposed after the start of the war against Hezbollah on July 12, on economic grounds.

Olmert said any relaxation of pressure on Lebanon's ports and airspace depended on the full implementation of U.N. resolution 1701, which governs the ceasefire with Hezbollah.

"The (resolution) is a fixed buffet and everything will be implemented, including the lifting of the blockade, as part of the entire implementation of the different articles," he said.

Olmert was equally firm when Annan suggested Israel should withdraw its troops from Lebanon within "days or weeks" once up to 5,000 U.N.-backed peacekeepers are on the ground.

"Israel will pull out of Lebanon once the resolution is implemented," Olmert said, indicating a longer timeline.

The U.N. force in south Lebanon, UNIFIL, said Israeli troops withdrew from near three villages in the far southeast of Lebanon yesterday. UNIFIL will patrol the area to make sure the Israelis are not present in the area, a statement added.

Olmert reiterated his call to deploy the U.N. force not just in southern Lebanon but also along the border with Syria. Israel wants the force to stop fresh arms reaching Hezbollah.

ECONOMIC MILLSTONE

The U.N. resolution says all states should prevent the smuggling of arms into Lebanon and it gives the Lebanese government the final say on whether U.N. troops should help with that task. Lebanon says its army is up to the job.

Italian Foreign Minister Massimo D'Alema said yesterday the international community would "not stand by and watch" if Syria sent arms to Lebanon, the news agency Ansa reported.

The secretary-general said he hoped to double soon to 5,000 the number of U.N. troops in Lebanon, and urged Israel and Hezbollah to end swiftly disputes blocking a lasting ceasefire.

Resolution 1701 calls for a deployment of 15,000 U.N. peacekeepers by Nov. 4, alongside Lebanese army forces.

On a visit to southern Lebanon on Tuesday, Annan said "serious irritants" to the truce were also the fate of captured Israeli soldiers and that of Lebanese prisoners held in Israel.

Lebanese Energy and Water Minister Mohammed Fneish, one of two Hezbollah ministers in the government, said the Shi'ite Muslim movement would free the two Israeli soldiers it seized on July 12 only as part of a prisoner exchange.

"The goal of this operation (on July 12) was to conduct indirect negotiations and a swap. This was the position before the (Israeli) aggression and it's only natural to reinforce it after the aggression," he told a news conference.

On Israel's other front, its forces killed four Palestinian gunmen and four civilians in an offensive in an Islamic militant stronghold in Gaza City, medics and witnesses said.

The latest casualties in the Shijaia neighbourhood raised to 14 the number of Palestinians killed over the past 24 hours in Israeli attacks on militants in Gaza and the occupied West Bank.