Israel released from prison on Sunday a Lebanese who had completed a six-year jail term on espionage charges and took him to the border with Lebanon for repatriation.

Nissim Nasser's release, announced by Israeli authorities, has raised speculation that it is linked to German mediation efforts to secure a prisoner swap between Israel and Lebanon's Hezbollah guerrilla group. Nasser, who was born in Lebanon to a Jewish mother and a Muslim father, was sentenced in 2002 to six years' imprisonment after being convicted of spying for Hezbollah.

"The prisoner was released from Nitzan Prison near Ramle (in central Israel) and is being escorted by police up north to Rosh Hanikra (on the Lebanese border)," police spokesman Micky Rosenfeld said.

"Later in the day he will be transferred to the ICRC (International Committee of the Red Cross) and then to Lebanon," he said. Lebanese political sources said last Monday that indirect talks between Israel and Hezbollah over a prisoner exchange have made major progress.

The Iranian- and Syrian-backed group's seizure of two Israeli soldiers in a raid along the border with Israel in 2006 touched off a 34-day war. Hezbollah leader Sayyed Hassan Nasrallah, in a speech last week, reiterated his vow that all Lebanese prisoners, including the long-held Samir Qantar, would be released soon. Israel holds about 10 Lebanese, including Qantar, widely seen as key to any deal with Hezbollah on returning the two soldiers.

Hezbollah has refused to say whether the two men are dead or alive. Qantar, 46, took part in a 1979 raid that killed two Israeli men and a four-year-old girl.