Israeli Prime Minister Ehud Olmert would not say in comments published Thursday whether Nasrallah remained a target. "There is no reason for me to notify Nasrallah through the media how we will act. We will not give him advance notice. He is holding a victory march because he has lost," Olmert told the Israeli newspaper Maariv.

The rally was being held at a barren 37-acre lot about a mile from the guerrilla group’s flattened headquarters. Thousands had arrived at the site from the south by foot, in buses and in cars, chanting Nasrallah’s name and waving Lebanese and Hezbollah flags. Members of Christian parties and pro-Syrian groups in northern Lebanon also traveled to the capital to participate.

Nasrallah’s appearance was seen as a show of Hezbollah’s strength at a time of increased friction with the Western-backed government of Prime Minister Fuad Saniora.

Hezbollah’s popularity among Shiites soared after it withstood weeks of punishing Israeli bombardment and kept firing rockets into northern Israel.

The group has refused to give up its weapons following the cease-fire. But the group, backed by Syria and Iran has come under renewed criticism from anti-Syrian factions who form a majority in Lebanon’s government and accuse Hezbollah of doing Damascus’ and Tehran’s bidding.

Hezbollah is armed with thousands of rockets and Nasrallah has said his arsenal survived the Israeli onslaught. He boasted in a TV interview last week that the guerrillas — and their weapons — were still at the Israeli border in south Lebanon.

The guerrillas have long kept a low profile. They rarely carry weapons in public and have sought to calm the fears of other religious communities in Lebanon by insisting that their arms are to fight Israel and won’t be turned against their fellow Lebanese. But many Christian and Druse minorities, as well as the large Sunni Muslim community, are unconvinced and have called for the state and its military to be the only armed force in the country.

As Hezbollah celebrated, Israeli soldiers continued to withdraw Friday from an area south of the coastal town of Naqoura and near Maiss al-Jabal in the northern Galilee panhandle, said a statement by the U.N. Interim Force in Lebanon, known as UNIFIL.

The statement said Indian and Ghanaian peacekeepers would set up checkpoints and conduct patrols in order to confirm the Israeli withdrawal and coordinate the deployment of Lebanese army units to the area on Saturday.

UNIFIL’s commander, French Maj. Gen. Alain Pellegrini, said he expected the rest of the Israeli troops to vacate southern Lebanon by the end of the month. "We are almost there," he said.