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Kidnapped IDF reservists Ehud Goldwasser and Eldad Regev could be returned by July 12, the Persian Gulf newspaper Al Itahad reported on Sunday.
According to the report, there has been significant progress in prisoner swap negotiations between Israel and Hizbullah, with an agreement possible by the July anniversary of the outbreak of the Second Lebanon War.
Hizbullah still demands that Israel release Lebanese security prisoners in return for Goldwasser and Regev, including convicted terrorist Samir Kuntar, the report said.
There was no immediate confirmation of the report.
A senior source in Hizbullah said the group would provide no information on the soldiers' condition without a prisoner release.
Regev and Goldwasser were kidnapped by Hizbullah during operations last summer, touching off the month-long war in Lebanon.