Following last Wednesday's swap of live terrorists for dead soldiers, media reports claimed that many Israelis felt cheated: Against all odds, they had expected Hizbullah to return living soldiers, and were outraged to receive mere corpses. It is frankly hard to sympathize with this. Given the overwhelming evidence that both soldiers were dead, anyone who deluded himself otherwise has only himself to blame. Yet in light of information that has emerged since the exchange, Israelis nevertheless had good reason to feel cheated. Even the facts known in advance were reason enough for outrage: Five live terrorists, including child-killer Samir Kuntar, plus 199 bodies, were exchanged for two corpses. As numerous analysts have noted, once the dead can be ransomed as easily as the living, kidnappers have little incentive to keep their victims alive. Moreover, the deal clearly inflated the price for Gilad Schalit, or any other kidnapped soldier known to be alive. After all, if Hizbullah can obtain a vicious murderer in exchange for two corpses, a live soldier ought to be worth dozens or hundreds of such murderers. And indeed, Palestinians say the swap bolstered Hamas's resolve not to compromise on its original demands - whereas cabinet ministers declared on Sunday that Israel is now obligated to accept many of these demands, since it cannot ransom corpses while refusing to ransom a living soldier. This is particularly grave because Hamas has greatly upped the ante on Israel's already lopsided prisoner swaps. Previous deals entailed ratios of around 450:1 (which is precisely why no thinking person could have imagined that Hizbullah would free living captives in exchange for a mere five terrorists). But Hamas is demanding a 1,000:1 ratio: 450 prisoners whose identities it will dictate, plus 550 chosen by Israel and released later in what our cabinet euphemistically terms a "gesture to [Palestinian leader] Mahmoud Abbas" - as if anyone were incapable of figuring out who really secured this "gesture." Moreover, whereas the most vicious killers were generally excluded from previous deals, Hamas is demanding hundreds of mass murderers in exchange for Schalit. Indeed, its list is so outrageous that the cabinet has thus far approved only 71 of the 450 names. Yet now, ministers are saying they must capitulate. ALL THIS was obvious in advance, and should have been reason enough for a responsible cabinet to refuse the deal. Yet new details that have emerged make the picture even worse. First, prior to the swap, the media repeatedly reported that Israel would not release Palestinians, it would only release Lebanese. Now, however, it turns out that the government promised to free "a few dozen" Palestinians at a later date, as a "gesture to the UN" (as if anyone will believe that). Clearly, this worsens the deal's ratio substantially. Even more disturbing, however, these prisoners will reportedly include older Fatah members serving long sentences for serious attacks - the very people Israel has repeatedly refused to release to Abbas. Personally, I oppose releasing terrorists to anyone. But allowing Hizbullah to achieve through violence what Abbas has been unable to achieve through negotiations is the worst of all possible worlds. Nothing could more clearly demonstrate that terror, not peace, is the best tactic to use. Second, according to the cabinet's original decision, the swap was conditional on Hizbullah providing satisfactory information about missing navigator Ron Arad. Yet last week, the cabinet unanimously voted Hizbullah's report completely inadequate - and then approved the swap anyway. It thereby once again proved that Israel has no red lines, that any "condition" it sets can be violated with impunity. Granted, governments have violated their own red lines before. Yet each such incidence further weakens the government's ability to set credible red lines in the future. MOST APPALLING of all, however, was the revelation that the government knew all along that the soldiers were dead: According to last week's media reports, an army investigation submitted in August 2006, about a month after the kidnapping, concluded that given the weapons used in the ambush, where they hit the armored personnel carrier, where the soldiers were sitting in the APC and other factors, one soldier was almost certainly killed instantly and the other mortally wounded. Yet rather than announce this fact, which would have greatly reduced public pressure for a deal, the government deliberately concealed it. And since government officials had said repeatedly during the month after the kidnapping that the soldiers were believed to be alive, their failure to correct this assessment naturally led people to conclude that it still held. Even worse, government officials continued actively misleading the public on this issue. On December 4, 2006, for instance, Ehud Olmert publicly termed the soldiers "men whom I hope are alive" - thereby fostering the illusion that they were. Later, the government did start saying the soldiers might be dead. But it never declared them dead officially or publicized the evidence pointing to this conclusion. The result was predictable: Most of the public, and the media, believed the soldiers were (or might be) alive, and therefore launched a massive campaign for their return - one that Tzahi Hanegbi, a senior member of Olmert's party, said last week no premier could have withstood. Yet even ignoring the obvious point that a leader's job is to shape public opinion, not be led by it, Olmert could easily have eliminated this particular pressure simply by hammering home the truth: that the soldiers were almost certainly dead. Why he chose instead to lie remains a mystery; one can only speculate that, with the public already enraged over the failed Lebanon war, he was afraid to admit that the soldiers whose return was the war's ostensible goal had in fact been dead all along - even though he could not have known this when it began. But whatever the reason, the outcome is unchanged: Olmert and his government deliberately misled the public about the soldiers' fate, thereby effectively collaborating with Hizbullah in encouraging public pressure for a bad deal. And Israelis will be paying the price of this deal for a long time to come.