Hostage Releases Seen as Important First Step : Lebanon: Iran, Syria now seem unwilling to let Shiite hard-liners derail a possible solution to the crisis.

The release of American hostage Edward A. Tracy and French relief worker Jerome Leyraud in Beirut on Sunday has heightened hopes among U.S. officials that new momentum has developed to end the nine-year foreign hostage saga in Lebanon.

The swift release of Leyraud, who was abducted just hours after the release of British hostage John McCarthy last Thursday, was thought by U.S. officials to be just as important as the release of Tracy after five years of captivity.

Iran and Syria now appear unwilling to allow Shiite hard-liners, or “spoilers,” to derail a possible solution to the hostage crisis, the officials said. Both nations are credited, in varying degrees, with pressing for the immediate release of Leyraud.

President Bush, speaking from his vacation home in Kennebunkport, Me., cited the significance of Leyraud’s release. “I think the release of this Frenchman shows that when countries and different factions come together, something can happen,” Bush said. “In other words, a real cry went up to get this man released and, sure enough, he was.”

In the past, when new hostages have been abducted after others were released, they have tended to linger in captivity for long periods. That certainly was the case for Tracy, Frank Reed and Joseph J. Cicippio, who were kidnaped by Shiite extremists in late 1986 when three other Americans were released after the U.S. arms-for-hostage swap with Iran. Reed was held four years, Tracy five, and Cicippio remains a captive.

With the release of Tracy and McCarthy, the Shiites have now fulfilled their commitment, first relayed from Iran to Washington through multiple diplomatic channels two weeks ago and repeated several times since then, to free one Briton and one American.

More important, the recent sequence of events is seen as the first step toward a comprehensive deal that could free up to 400 people, including Western hostages and Lebanese and Israeli captives, U.S. officials and Middle East analysts said Sunday.

Unlike the release of American hostages Reed and Robert Polhill last year, U.S. officials hope that the latest releases will not be a momentary blip on the screen.

Yet the past continues to breed caution. President Bush was clearly hesitant Sunday to say whether the release of McCarthy, Tracy and Leyraud signaled new signs of progress. “It seems like years ago hostages were released, everyone’s hopes were up that this would signal the beginning of the end and it has failed to materialize,” the President said. “So I think we’ve got to be a little cautious on that.”

The diplomatic focus is now moving to Israel. The Shiite extremist groups in Lebanon insist that Israeli officials must now make the next move before any of the 10 remaining Western hostages can be freed.

Despite growing international pressure, Israel balked Sunday at demands that it free the approximately 375 Arab captives under its control, reiterating its position that seven Israeli troops in Lebanon must be released first.

Hours after Tracy’s release, the Defense Ministry issued a statement repeating Israel’s conditions for entering the hostage bazaar.

“Israel again calls on all countries, primarily Iran and Syria, and to all organizations holding Israeli missing or captives, to allow access to them or provide proof about them,” the statement said. “This would permit negotiations for the release of all the hostages, including Israeli soldiers who are captured or missing.”

Israeli Defense Minister Moshe Arens indicated that Israel is unwilling to consider even a “good faith” release of some Arab captives to maintain the new momentum.

“We are certainly willing and eager to contribute to bringing about the release of all hostages held but certainly not at the expense of abandoning our people over there,” Arens said, speaking on CBS’ “Face the Nation.”

“The problem that we face is that for many years now we have not had even a sign of life over there,” he said. “These Hezbollah (a Shiite Muslim political-religious organization in Lebanon) terrorists are not even ready to do that, to provide a sign of life. That’s the first thing in this regard before we can go any further.”

The situation also became even more complicated Sunday when the South Lebanon Army, an Israeli-backed militia that holds most of the Arab captives, added yet another condition to an already complex list of demands made by various players in the hostage drama.

Maj. Gen. Antoine Lahad, commander of Christian-dominated militia in the Israeli-controlled enclave of southern Lebanon, said in Israel that none of the roughly 375 Arabs would be released until nine South Lebanon troops held by Lebanese Muslim militias also are freed.

Yet, even Iranian officials seemed upbeat about further movement Sunday. In Syria, visiting Iranian Interior Minister Abdullah Nouri said: “We have advised . . . these groups . . . that they should strongly avoid taking hostages . . . (and) we are hopeful that the issue of hostages, whether Western hostages or non-Western hostages, can be solved totally.”

Nouri denied that his five-day visit to Syria is connected with the hostage issue. But he talked Saturday with Lebanese Sheik Mohammed Hussein Fadlallah, who is widely considered a spiritual mentor to Hezbollah, the umbrella group for Shiite extremists in Lebanon.

Iran’s U.N. ambassador, Kamal Kharazi, said that he, too, is “optimistic” about the prospect for further progress.

“It all depends if the international community will put enough pressure on the Israelis to release the Lebanese kept in Israel, because we have the momentum now and I think we all have to help to put the speed on this process,” he said on “Face the Nation.”

The remarks by Nouri and Kharazi were among the most hopeful public statements ever made by Iranian officials on the hostage crisis.

But in what may turn out to be a clash of wills between two of the region’s most stubborn governments, Kharazi indicated that Iran is not prepared to use its influence unless Israel breaks the logjam by releasing Arab captives.

“Certainly we expect the U.S. and Britain as well as the (U.N.) secretary general to speak to them and to encourage them and to put pressure on them to give (a) positive response,” he said.

Times staff writers James Gerstenzang, in Kennebunkport, and Dan Williams, in Jerusalem, contributed to this story.