Nasrallah said Hezbollah will choose the "time, the place, the way and the means" by which the Shiite militant group will seek revenge for the death of Imad Mughnieh in a Damascus car bombing on February 12.

"The Israelis are worried as they should be because our blood will not be spilled in vain," said Nasrallah via video link at a ceremony at his Beirut stronghold marking the end of a 40-day mourning period for Mughnieh.

Israel has denied Hezbollah accusations that it was involved in his murder.

"Those who killed Mughnieh must be punished and must taste vengeance," Nasrallah said to the cheers of thousands of Hezbollah supporters.

But he played down the possibility of a repeat of its summer 2006 war with Israel.

"I don't want to make projections, but I would like to point out that war has become costly (for Israel)," Nasrallah said. "The decision to go to war is not one the Israeli leadership can make lightly because in Lebanon there is the power of the resistance, the will of the resistance and the culture of the resistance."

"It is no longer simple for the United States to wage war against Iran, or for Israel to launch a war against Syria or Lebanon as was the case before the July 2006 war," Nasrallah added, referring to the devastating 34-day conflict between his group and Israel.

The war, sparked by the capture by Hezbollah of two Israel soldiers in a cross-border raid, left some 1,200 Lebanese dead, most of them civilians. More than 160 Israelis, mostly soldiers, were also killed.

Nasrallah said that although his group was still bent on Israel's destruction, it would nonetheless continue negotiations to free Lebanese prisoners in Israeli custody.

"Although they killed Mughnieh, we will not stop negotiations to free the detainees. We will continue our work," he said.

Nasrallah added that a poll conducted by clerics following Mughnieh's death showed that nearly all Lebanese -- be they Sunni, Christian, Druze or Shiite -- wanted to see Israel disappear.

"Eighty-five percent of the Lebanese people support the decline of the Zionist regime," he said. "But this does not mean that we are going to open a battlefront in the south of the country. This is not Lebanon's responsibility."

Nasrallah had threatened to wage "open war" against Israel after Mughnieh's death, prompting the Jewish state to alert its citizens travelling abroad to exercise extreme caution for fear of reprisals.

© 2008 Agence France-Presse