Israel has demanded Lebanon handover two Israeli soldiers captured by Hezbollah militia and pull Hezbollah back from the border with Israel in return for stopping its assaults on Lebanon, Lebanese government said on Sunday.

In a phone call to Lebanese Prime Minister Fouad Siniora,Italian Prime Minister Roman Prodi conveyed Israeli Prime Minister Ehud Olmert's conditions for halting escalation, Lebanese Information Minister Ghazi Aridi told reporters after an emergency cabinet meeting.

"Prodi told Siniora that Olmert set two conditions for a ceasefire: handover of the two captured soldiers and Hezbollah's withdrawal beyond the Litani (river)," said Aridi.

"Nothing is official because the real negotiations have not started yet," he added.

In 1978, Israel invaded Lebanon and pushed back the Palestinian guerrillas in Lebanon beyond the Litani River, about 30 km north of Israel's border with Lebanon, to prevent rocket attacks on Israel's northern communities.