BEIRUT, Lebanon - The Israeli army began handing over positions to the U.N. early Thursday, stepping up its withdrawal from southern Lebanon after the Lebanese government agreed to deploy troops near Israel's border for the first time in 40 years.

Lebanese Brig. Adnan Daoud, left, talks to a U.N. peacekeeper in the southern town of Marjayoun, Lebanon, in this picture taken Friday, Aug. 12, 2006. Daoud was ordered arrested Wednesday Aug 16 2006 for appearing in a videotape drinking tea with Israeli soldiers who had occupied his south Lebanon barracks during their incursion of the country .Lebanese law forbids any dealings with Israel. [AP]

The Lebanese Cabinet decision fell short of agreement on disarming the Shiite Muslim militant group, which has insisted it has the right to defend Lebanese territory as long as Israeli troops remain in the country.

More than 50 percent of the areas Israel holds has been transferred to the U.N. peacekeeping force known as UNIFIL, the Israeli army said, adding the process would occur in stages and would depend on a stronger U.N. force as well as "the ability of the Lebanese army to take effective control of the area."

The army said it was the first time it handed over territory to the United Nations, although it had redeployed some of its forces previously.

The Lebanese army has been assembling north of the Litani River, 18 miles from the Israeli border, and was to cross Thursday morning.

The cease-fire plan calls for the 2,000-member U.N. force to increase to 15,000 and to be joined eventually by an equal number of Lebanese to assume control as Israeli forces withdraw.

Israeli Foreign Minister Tzipi Livni said completion of the Israeli pullout depended on the presence of both the Lebanese army and an international force. She also said she wanted the international force to help monitor the border to prevent Iran and Syria from replenishing Hezbollah's weapons.

"If there is a place that Israel can withdraw from and the Lebanese army can come, plus international forces, we'll do it," Livni said after meeting with U.N. Secretary-General Kofi Annan in New York. "But if it takes time until the international forces are organized, it takes time until Israel withdraws. This is the equation."

Israel had as many as 30,000 troops in southern Lebanon during the conflict that began July 12 when Hezbollah captured two Israeli soldiers in a cross-border raid. Lt. Gen. Dan Halutz, the Israeli chief of staff, said earlier that Israeli soldiers would stay in southern Lebanon for months, if necessary.

Despite continued division over disarming Hezbollah, the Cabinet decision to deploy Lebanese troops was a major step toward meeting demands that the guerrillas be removed from Israel's northern frontier. It would also mark the extension of government sovereignty over the whole country for the first time since 1969, when the Lebanese government sanctioned Palestinian cross-border attacks on Israel.

The Lebanese government, which includes two Hezbollah ministers, met for the first time since the cease-fire took hold Monday, after two postponements because of divisions over Hezbollah's arms. The guerrillas have resisted pressure to give them up or even withdraw them from the border area.

"There will be no confrontation between the army and brothers in Hezbollah," Information Minister Ghazi Aridi said after the Cabinet meeting. "That is not the army's mission. ... They are not going to chase or, God forbid, exact revenge (on Hezbollah)."

"There will be no authority or weapons other than those of the state," Aridi said. "If any weapon is found, even the brothers in Hezbollah have said 'Let it be in the hands of the army. No problem.' "

The militant group has insisted it has the right to defend Lebanese territory as long as Israeli troops stay.

Hezbollah's top official in south Lebanon hinted that the guerrillas would not disarm or withdraw but would keep its weapons out of sight. Hezbollah will have "no visible military presence," Sheik Nabil Kaouk told reporters in the southern port city of Tyre.

Hezbollah has used charity work and social welfare programs financed by Iran to win wide support throughout Lebanon.

It continued that tradition Wednesday, saying it would help tens of thousands of Lebanese reconstruct homes that were destroyed by Israel, a move likely to deepen support among Shiites, who make up about 35 percent of Lebanon's 4 million people.

At a Beirut high school, Hezbollah officials took information from hundreds of people who need money to rebuild. The group's leader, Sheik Hassan Nasrallah, has promised money for civilians to pay rent and even buy furniture.

The Lebanese death toll, meanwhile, rose to 842 when rescue workers pulled 32 bodies from the rubble in the southern town of Srifa, target of some of Israel's heaviest bombardment in the 34-day conflict. The figure was assembled from reports by security and police officials, doctors and civil defense workers, morgue attendants as well as the military.

The Israeli toll was 157, including 118 soldiers, according to its military and government.

In a televised address, Prime Minister Fuad Saniora praised Lebanon's resistance, saying it showed that Israel's military was "no longer a force that cannot be resisted, an army that cannot be defeated."

He said Lebanon has the right to take charge of its destiny and warned of foreign meddling that has made the country into a battleground for Israelis, Palestinians, Syrians and Iranians over the decades.

The government ordered the army to "insure respect" for the Blue Line, the U.N.-demarcated border between Lebanon and Israel, and "apply the existing laws with regard to any weapons outside the authority of the Lebanese state."

That provision does not require Hezbollah to give up its arms, but rather directs them to keep them off the streets.

Foreign diplomats worked to assemble the international force that will augment the current 2,000-member U.N. peacekeepers, known as UNIFIL, who have been in the area for more than two decades. The U.N. hopes 3,500 international troops can reinforce the contingent already on the ground within 10 to 15 days, Assistant U.N. Secretary-General for Peacekeeping Hedi Annabi said.

French Defense Minister Michele Alliot-Marie said France is willing to lead the enlarged U.N. force until at least February. But she expressed concern that the force's mandate was "fuzzy" and said the peacekeepers needed sufficient resources and a clear mission to avoid a "catastrophe."

The U.N. resolution passed Friday authorized the peacekeepers to use force "to ensure the movement of aid workers and protect civilians in imminent danger, among other situations." But France has been demanding a more specific mandate, including when it may use firepower.

In a sign of lingering danger in south Lebanon, security officials said an explosive detonated Wednesday in the town of Nabatiyeh, killing 20-year-old man. A girl in the area was injured by explosives earlier.

Aid officials said unexploded ordnance was forcing relief workers to move gingerly in evacuating the wounded and in making deliveries of food and fuel. Lebanese authorities and Hezbollah sent teams across south Lebanon to clear explosives.