Prime Minister Ehud Olmert failed the country by giving in to US pressure and stopping the offensive against Hizbullah without ensuring the return of the two IDF reservists it held, a high-ranking defense official told The Jerusalem Post over the weekend. "This was a failure," he said. "We went to war, fought for a month and then decided to stop without any assurances that the kidnapped soldiers would be returned. This is a disgrace." Olmert has appointed Ofer Dekel, former deputy head of the Shin Bet (Israel Security Agency), to coordinate between the various security agencies involved in efforts to retrieve the two soldiers. The assumption within the defense establishment, the official said, was that Eldad Regev and Ehud Goldwasser - kidnapped in a cross-border attack on July 12 - were alive and being held in Lebanon. An Italian government official said this week that he received messages from Ali Larijani, secretary of Iran's Supreme National Security Council, asking Rome to act as a mediator between Israel and Hizbullah and help initiate a prisoner swap. The Israeli defense official said that the government was currently in the process of evaluating which prisoners it would be willing to release in exchange for Regev and Goldwasser. He said that European countries, although not necessarily Italy, would play a key role in mediating between Israel and Hizbullah. From 2000, Germany negotiated with Hizbullah on Israel's behalf. Those negotiations led to the return of the bodies of three IDF soldiers and businessman Elhanan Tannenbaum in exchange for 400 prisoners. "We will need to negotiate and release prisoners in exchange for the return of our soldiers," the official said. Meanwhile Thursday, activists working to release Regev and Goldwasser announced plans to hold a major rally at Rabin Square in Tel Aviv on Thursday night. "There is grave danger," said Maj.-Gen. (res.) Uzi Dayan, a former deputy chief of General Staff. "Time is critical. The State of Israel has not succeeded in obtaining any indication of the soldiers' condition."