JERUSALEM (CNN) -- Israel buried two soldiers Thursday whose remains were returned in an exchange with the Lebanese militant group Hezbollah the day before.
The funeral of Eldad Regev took place with full honors at a military cemetery in Haifa.
Friends and relatives in the coastal city of Nahariya watched as soldiers lowered the wooden coffin of Sgt. Maj. Ehud Goldwasser into the ground.
And in Haifa, thousands of mourners attended the funeral at the military cemetery for 1st Sgt. Eldad Regev.
Goldwasser and Regev were captured after Hezbollah militants crossed into Israel on a raid in July 2006. Watch funeral of Ehud Goldwasser »
Goldwasser had been a first sergeant and Regev had been a sergeant first class when they were seized. They were "posthumously promoted" after their remains were identified following the exchange with Hezbollah. Watch funeral of Eldad Regev »
Israel and Hezbollah fought a 34-day war in 2006, during which Israeli troops invaded Lebanon in an unsuccessful attempt to rescue the soldiers.
On Wednesday, Hezbollah returned the remains of Goldwasser and Regev in exchange for Israel freeing five Lebanese militants and the remains of 199 Lebanese fighters.
The five militants included Samir Kuntar, who was convicted of killing an Israeli police officer, shooting dead a 28-year-old man and killing his 4-year-old daughter by bludgeoning her in the head in 1979.
Kuntar, who was sentenced to 542 years at the age of 16, is reviled in Israel but received a hero's welcome in Lebanon on Wednesday.
Once in Beirut on Wednesday, Kuntar -- the longest-held Lebanese prisoner in Israel -- told a crowd of thousands he would continue to fight for the liberation of the Palestinian territories. Watch Hezbollah supporters celebrate »
"I return today from Palestine, but believe me, I return to Lebanon only in order to return to Palestine," Kuntar said.
The other four militants whom Israel freed were fighters seized during its 2006 war in Lebanon. Israel also returned the remains of 199 Lebanese fighters who have been killed in clashes with Israeli forces throughout the years.
The Shiite militia Hezbollah cast the swap as a victory for all Lebanese, with one official calling it "an official admission of defeat."
Israeli Prime Minister Ehud Olmert condemned the celebrations. "Woe to the nation that celebrates in these hours the release of a bestial person who smashed the head of a 4-year-old child," he said in a statement.
Mark Regev, spokesman for Olmert, said, "To get the two servicemen back, we've had to pay a high price. We deliberated, we grappled with this decision for a long time, because ultimately, it's not an easy decision."
"This painful process exemplifies Israel's moral commitment to secure the return of all of their soldiers sent out on operational missions," the military added.
"It demonstrates a compelling moral strength which stems from Judaism, Israeli societal values and from the spirit of the IDF," the agency said.
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