A convicted Hezbollah spy returned from Israel to a hero's welcome in Lebanon on Sunday, and Hezbollah turned over the remains of what it said were dead Israeli soldiers, in what could be the first stage of a larger prisoner exchange between the bitter enemies.

Israeli authorities released Nasim Nisr, an Israeli of Lebanese descent, early Sunday after he completed a six-year sentence for espionage, driving him from a prison in central Israel to the northern Rosh Hanikra crossing. Cameramen surrounded the white van carrying Nisr a blue gate swung open to allow him through the frontier.

Hezbollah official Wafik Safa told the group's al-Manar TV station that it handed over a brown box containing what it said were the remains of Israeli soldiers killed in the monthlong Lebanon war in 2006. Nisr stood beside Safa as he spoke.

An Israeli security official said Hezbollah said the return of the remains was a "gesture" that had not been coordinated with Israel. The official spoke on condition of anonymity because of the sensitivity surrounding the ongoing negotiations.

Helge Kvam, a Red Cross spokesman in Jerusalem, called Hezbollah's move a "complete surprise."

The box was handed over to Israel's army. Military doctors and rabbis were to examine the remains, which were then to be transferred to a forensic institute, the army said.

The army said it has appointed a panel to contact the families of the soldiers whose remains are suspected to be in the box. Israeli media have said Hezbollah was believed to be holding the remains of 10 soldiers already confirmed killed in fighting.

Sunday's exchange added to speculation that a major swap is in the works. Hezbollah leader Hassan Nasrallah predicted last month that Israel will release prisoners it is holding "very soon."

German mediators have been trying to work out a swap for months. Israel is believed to be holding seven Lebanese in its prisons, while Hezbollah has been holding two Israeli soldiers it captured in a 2006 cross-border raid that sparked that year's war. The soldiers are believed to have been badly wounded, and Hezbollah has offered no proof that they are still alive.

In Beirut, German Foreign Minister Frank-Walter Steinmeier said he was pleased with Sunday's developments.

"Concerning the prisoner exchange, I would like to say that I am happy with you that preliminary steps have been taken in this direction. I also hope with you that these preliminary steps have created a positive dynamism in these secret talks which take place in the framework of mutual confidence," he said after a meeting with Lebanese Prime Minister Fuad Saniora.

A larger prisoner swap would end a difficult chapter for Israel. The two captive soldiers have become symbols of what is widely seen as a failed war, and their families have become prominent figures as they travel the world pushing for the return of their loved ones.

A deal, however, would not end the deep enmity between Israel and Hezbollah. Israel believes the group maintains a large arsenal of tens of thousands of rockets aimed at Israel, while Hezbollah, with Iranian backing, says it remains committed to the Jewish state's destruction.

Nisr was convicted in 2002 of espionage. He admitted in a plea bargain to passing information to a senior Hezbollah officer. His lawyer, Smadar Ben-Natan, said Nisr's relatively light sentence showed he did not pass on any sensitive information.

In Lebanon, TV stations carried a live broadcast of his arrival. Wearing a white shirt with blue and green stripes, he hugged weeping relatives, including his mother. In brief remarks, he thanked Nasrallah and expressed his wish to see other Lebanese prisoners released.

Nisr, 39, was born in Lebanon to a Jewish Lebanese mother and a Shiite Muslim father. Because of his Jewish ancestry, he qualified for Israeli citizenship and moved to Israel in 1992. He has a 10-year-old son from a first marriage, and two daughters, ages 10 and 7, from his current wife. Israel and Lebanon have officially been in a state of war since Israel was established in 1948.

Nisr was "nervous but happy," said Ben-Natan. At the same time, she said Nisr was saddened to leave his wife and children. Nisr asked to be stripped of his citizenship in 2004, hoping he'd be included in a prisoner swap at the time between Hezbollah and Israel. Israel does not release its own citizens in such swaps.

Ben-Natan said Sunday's swap signaled a broader deal taking place.

"The prisoners are very optimistic, they see it as a sign, they presume that an exchange that includes them is coming soon," said Ben-Natan. She represents two of the Lebanese prisoners still held by Israel.

A larger swap is extremely emotional for Israelis because it would likely involve Samir Kantar, the longest-serving Lebanese prisoner.

Kantar is serving multiple life sentences for infiltrating northern Israel in 1979 and killing four Israelis, including a 28-year-old man, the man's 4-year-old daughter and two Israeli policemen.

Many Israelis see him as especially brutal. He was convicted of killing the girl by smashing her head against rocks and then with a rifle butt. During the incident, the girl's mother smothered a 2-year-old daughter to death while hiding from Kantar.

Hezbollah has demanded Kantar's release, alongside other Lebanese prisoners, in exchange for the two Israeli soldiers it is holding.

Kantar's lawyer, Elias Sabbagh, said he saw the jailed Lebanese prisoner on Sunday, and said he was "optimistic" about an impending deal.

"All the signs are that there'll be a deal, the question is when, and how many people it will include," Sabbagh said.