"The people of Israel are embracing the Regev and Goldwasser families. Our sadness conveys strength and a deep understanding of the reality in our country," Welfare Minister Isaac Herzog told AFP.
Israeli pathologists were still identifying the bodies said to be those of Eldad Regev and Ehud Goldwasser, handed over by Hezbollah in the first stage of a prisoner exchange under which Israel was to release to Lebanon four fighters and a convicted murderer.
Samir Kantar, a Lebanese fighter with a Palestinian faction, killed three Israeli civilians, including a child, in a 1979 raid in northern Israel that shocked the country to the core.
"The fact that in Lebanon they will celebrate the return of a despicable murderer, who crushed the head of a four-year-old girl, shows the difference in the values between the two nations," Herzog said.
The mood in Israel was sombre as television channels aired footage of the two coffins, ending two years of uncertainty over the fate of Goldwasser and Regev, whose capture by Hebzollah in a cross-border raid on July 12, 2006 sparked a devastating 34-day war.
Prime Minister Ehud Olmert's spokesman, Mark Regev, slammed the Iranian and Syrian-backed Hezbollah for the celebrations it was preparing across Lebanon.
"Samir Kantar is a brutal murderer of children. Anybody celebrating him as a hero is trampling on basic human decency," he said.
Housing Minister Zeev Boim, one of three ministers who voted against the swap, echoed those feelings.
"We know Hezbollah and you don't think anyone in Israel is surprised by their victory parades. This is their culture but not ours," he told Channel Two television. The Maariv daily said the deal was a humiliation for Israel.
Hezbollah leader Hassan Nasrallah "will entrench his image as the only Arab leader who fought against Israel and defeated it," the paper said.
"No one except for him -- neither the Lebanese government nor the Arab League, the UN or the Red Cross -- none of these brought home a proud Lebanese citizen, who had been rotting in an Israeli prison for 29 years.
"No Arab entity before him kept Israel in suspense until the last moment, conducted tough negotiations with it and did not even reveal whether its POWs were alive," Maariv added.
The Israel Hayom daily said the swap "sends a negative message to our enemies".
"Israel's willingness to pay a real price for kidnapped soldiers who are not known with certainty to be alive -- or worse, who are known to be dead -- could cause the other side to think that it has no interest in keeping hostages alive, because it will receive something in return in any case," it said.
The paper voiced concern that the exchange with Hezbollah would have a negative impact on negotiations with the Palestinian militant group Hamas for the release of Corporal Gilad Shalit, a conscript seized in a deadly cross-border raid from Gaza in June 2006.
It said the release of Kantar would inevitably embolden Hamas to demand that Israel drop its longstanding refusal to release Palestinians "with Jewish blood on their hands."
"Now it is even clearer to the other side that the 'blood on the hands' restriction has also weakened, if not disappeared," it said.
"Therefore, a real risk has arisen that Hamas will try to show that it is better than Hezbollah at pressuring Israel, and the negotiations with it will be more difficult."
