UN Secretary General Kofi Annan said Tuesday that he expected good news about Israel lifting its blockade of Lebanon within the next 48 hours. Annan spoke in Alexandria, north of Cairo, after a meeting with Egyptian President Hosni Mubarak, on the last leg of a Mideast tour in the wake of the Hizbullah-Israeli war in Lebanon. He did not elaborate further on blockade-lifting expectations. Israel has said previously that it would lift the blockade only after protections were in place to prevent Hizbullah from acquiring more arms. On Monday, Annan said in the Saudi Arabian Red Sea port of Jiddah that Israel and Hizbullah had agreed to indirect talks for the release of kidnapped IDF soldiers Ehud Goldwasser and Eldad Regev, and that he would appoint a mediator. Senior government officials in Jerusalem, however, denied that Israel had agreed to indirect talks with Hizbullah through a UN-appointed mediator for the release of the soldiers. Annan said at a press conference that both sides had agreed to let his office negotiate between them on the issue of the soldiers, according to an Arabic translation of his comments. He said he would appoint a mediator who would operate secretly to facilitate working between the two sides. But senior sources in Jerusalem said Israel would not negotiate with Hizbullah and was demanding the unconditional release of the soldiers, as is called for under UN Security Council Resolution (UNSC) 1701. "We don't need a mediator, we need the unconditional return of the soldiers," the sources said. The sources said Israel viewed the UN, which adopted UNSC 1701, as responsible for the implementation of the resolution. Foreign Ministry spokesman Mark Regev said the issue of the kidnapped soldiers was raised in each of the meetings Annan had in Israel last week. "We said their continued holding was a direct violation of Security Council Resolution 1701, upon which the cease-fire is based, and we urged him to act to bring about their immediate and unconditional release in accordance with the resolution," Regev said. Hizbullah has said it would only free the soldiers as part of a swap for Arab prisoners in Israeli jails. Hizbullah's chief spokesman, Hussein Rahal, refused to comment on the report. Annan did not specify whether the mediation would center on proposals for a prisoner swap. Annan's spokesman, Ahmed Fawzi, said Israel and Hizbullah had both requested that Annan mediate in the prisoner issue. "The secretary-general has accepted to play a role as mediator in the matter of the abducted soldiers," Fawzi said. Annan was in Jiddah to meet with Saudi Arabia's King Abdullah. This was his latest stop in an 11-day tour of the Middle East aimed at bringing about the implementation of UNSC 1701.