An infamous Lebanese killer was freed from Israeli custody Wednesday in a controversial prisoner exchange between Israel and Hezbollah.

Israel freed Samir Kantar along with four other prisoners in exchange for the bodies of two Israeli soldiers captured on July 12, 2006.

The men were brought home in Red Cross vehicles and were welcomed with widespread celebrations.

Hezbollah leader Hassan Nasrallah made a rare appearance to seize on the public relations coup of winning Kuntar's historic release.

"The age of defeats is over," he declared to a crowd of thousands.

"This is a national holiday across Lebanon, this is a victory for Hezbollah, this is a victory for all Lebanese, there are now no Lebanese left in Israeli jails," CTV's Middle East Bureau Chief Janis Mackey Frayer reported Wednesday.

Frayer said Kantar is "most certainly one of the most notorious and most hated murderers in Israeli jails."

He had been serving multiple life terms for an attack that killed a 4-year-old Israeli girl, her father, and a policeman.

In 1979, Kantar and three other gunmen used a rubber dinghy to get from Lebanon to the Israeli coastal town of Nahariya.

The group took Danny Haran and his daughter hostage and tried to return to Lebanon. But, when their dinghy was punctured by gunfire, they went on a rampage instead.

Kantar, after shooting Haran dead, smashed the young girl's skull against a rock with his rifle butt.

Kantar, who was 16 at the time, has always denied killing the child or smashing her skull. He claims she may have died in the Israeli rescue operation.

Haran's wife, Smadar, fled into a crawl space in the family's apartment with her two-year-old daughter.

While trying to stifle her cries, Smadar Haran accidentally smothered her daughter to death.

Gadi Metzger was a policeman who was called to the attack that night and said, "I can't imagine any state would release a man willing to do such a thing to a little girl."

Frayer said the deal was a contentious one in Israel and that public opinion was very mixed.

"They're very adamant about getting soldiers back but they do believe that Israel is paying a very high price by sending back five live Lebanese prisoners for the bodies of these two soldiers," she said.

Israeli soldiers

Earlier Wednesday, Hezbollah handed over the bodies of Israeli soldiers Ehud Goldwasser and Eldad Regev.

Israel, after conducting DNA testing, confirmed that the two bodies did belong to the Israeli soldiers.

Only then did they release the five prisoners. The remains of 199 Lebanese and Palestinian fighters were also sent into Lebanon.

In Israel, family and friends of the two soldiers cried as the bodies were handed over to the Red Cross.

Although Israeli officials suspected they were dead, the sight of the coffins was the first confirmation that they had been killed.

Regev's aunt sank to the ground when she saw the coffins appear Wednesday. Other family members and friends rocked back and forth in prayer while some pulled on their hair.

Regev's father, Zvi, said he fell apart when he saw the coffins.

"It was horrible to see it. I didn't want to, I asked them to turn off the TV,'' he said, choking back tears. "In my opinion there is no price for our sons."

"Nasrallah, you will pay,'' several vowed.

Others cast blame on Israeli Prime Minister Ehud Olmert, saying the soldiers died for nothing.

Goldwasser and Regev were captured in a cross-border raid two years ago, sparking a 34-day war with Hezbollah.

The prisoner exchange was mediated by a UN-appointed German official over an 18-month period.

With files from The Associated Press