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Defense Minister Amir Peretz informed visiting UN Secretary General Kofi Annan yesterday that the air and naval blockade of Lebanon would continue until UNIFIL and the Lebanese army were in a position to impose an arms embargo on the transfer of arms to Hezbollah from Iran and Syria, in accordance with Security Council Resolution 1701.

A diplomatic source told Haaretz yesterday that while Annan had publicly expressed reservations over the ongoing blockade, the UN quietly recognized that the blockade had to continue until UNIFIL forces completed their deployment along the Lebanon-Syrian border.

Annan said he spoke with Peretz about lifting the blockade "as soon as possible in order to allow Lebanon to go on with normal commercial activities and also rebuild its economy."

Meanwhile, it appears Prime Minister Fouad Siniora's government is in no hurry to see an end to the blockage, fearing that its lifting would allow the flow of arms to Hezbollah from Syria to resume.

In a meeting with Annan yesterday, Peretz explained Israel's position and presented evidence that Syria and Iran would continue in their efforts to replenish Hezbollah's missile arsenal.

Israel has promised the UN chief that it would ensure the blockade was flexible enough to allow humanitarian aid to flow to Lebanon and facilitate its reconstruction.

Peretz also said that "Israel will pull out once there is a reasonable level of forces there."

After the meeting with Peretz, Annan appealed for all sides to work together to ensure the peace holds and "not risk another explosion in six years or 20 years."

In meetings between Israel and the UN, officials decided to establish an operations headquarter in New York to support UNIFIL. The headquarters will be supported by a logistics center in Cyprus, and its operations will be facilitated by the appointment of liaison officers in Beirut and Tel Aviv.

Israel also informed the UN that it would not agree to the participation of troops from Malaysia and Bangladesh in the reconstituted UNIFIL mission, nor that of any other countries that had voiced support for Hezbollah in the course of the war.

Meanwhile, news reports from Turkey suggest that a decision to participate in the peacekeeping force is likely.

Italy, the largest contributor to UNIFIL, has announced that it will deploy 1,000 soldiers in southern Lebanon within the next 48 hours, joining the 2,000-man UNIFIL.

The blockade over Lebanon and the release of the abducted IDF soldiers is expected to dominate the agenda in meetings between Annan and Prime Minister Ehud Olmert.

Annan also met with the families of three kidnapped Israel Defense Forces soldiers last night.

Reservists Ehud Goldwasser and Eldad Regev were kidnapped by Hezbollah in a cross-border raid on July 12, which sparked the 34-day conflict ended on August 14 by a UN brokered cease-fire. Corporal Gilad Shalit was abducted by Palestinian militants in late June, after they tunneled under the Gaza-Israel border and raided an IDF outpost.

Goldwasser's wife, Karnit, told Israel TV after the meeting with Annan that he gave them no new information about the fate of their loved ones.

"But the good news was that we got a personal pledge from the secretary-general of the UN that he accepts the mission to get the three kidnapped soldiers home and that's a really big thing," she said.

The relatives said they had many international officials have paid mere lip service to efforts to free their relatives.

"We asked him to be the one to start turning words into deeds and bring about their return home, all three," Karnit Goldwasser said. "He spoke to Lebanese cabinet ministers from Hezbollah and asked them to help him."

The families of the three men also appealed for word on the soldier's conditions.

"They must first of all give us a sign of life. [Annan] must act toward that. It's a moral demand that's basic in any negotiations," Regev's brother Benny said before the meeting.