Hezbollah sees progress in talks to free 2 Israelis

DUBAI (Reuters) - Hezbollah leader Sayyed Hassan Nasrallah, in remarks aired on Sunday, said talks to free two abducted Israeli soldiers were making progress and it was a "matter of time" before a solution would be found.

"We have no problem on the matter of the captives. We have two captives and we are negotiating about them," Nasrallah told Iran's al-Alam television.

"The matter is on its way towards a solution ... it is a matter of time," he said, without elaborating.

The capture of the two soldiers by Hezbollah after a raid into northern Israel in July triggered a 34-day war.

The United Nations is mediating talks to secure a prisoner swap between the guerrilla group and Israel. Hezbollah want to exchange them for Lebanese and Arab prisoners in Israeli jails.

An official Israeli enquiry has criticized Israeli Prime Minister Ehud Olmert over the war, which he launched to free the two soldiers and crush Hezbollah.