JERUSALEM, July 6 (Reuters) - Israel will begin exhuming the bodies of Hezbollah fighters buried in Israel ahead of a swap deal with the Lebanese guerrilla group, which is holding two Israeli soldiers, a military official said on Sunday.

The official, speaking on condition of anonymity, said the army will begin exhuming the bodies on Monday.

Hezbollah captured army reservists Ehud Goldwasser and Eldad Regev in a July 2006 border ambush, triggering a month-long war in Lebanon.

Israeli Prime Minister Ehud Olmert ruled out talks on returning the two soldiers, who are believed to be dead. Olmert later relented, negotiating through a U.N.-appointed German mediator.

The deal, expected to take place this month, will secure the handover of the two Israelis in exchange for five Lebanese gunmen, dozens of bodies of slain infiltrators and the remains of eight Hezbollah men killed in the 2006 war.

Israel also agreed to release at a later stage an undisclosed number of Palestinian prisoners. (Writing by Ari Rabinovitch; Editing by Dominic Evans)

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