Prime Minister Ehud Olmert has rebuffed calls for a swift end to Israel's seven-week blockade of Lebanon.
Speaking after talks with UN Secretary General Kofi Annan, he said the siege would only be lifted once ceasefire terms were fully implemented.
Mr Olmert said that one of the key conditions was the release of two Israeli soldiers captured by Hezbollah.
A Hezbollah cabinet minister has said that there will be no unconditional release of the Israeli soldiers.
Lebanese Energy Minister Mohammed Fneish said on Wednesday that such a release was "not possible", and that the pair would only be freed as a result of a prisoner exchange with Israel.
"This is the principle to which Hezbollah and the resistance are adhering," he said.
In other developments:
- The European Commission pledges 42m euros to help rebuild Lebanon ahead of a donors conference in Sweden
- Lebanese Prime Minister Fouad Siniora says his government will pay $33,000 in compensation to families whose homes - numbering 79,000 - were destroyed in the conflict
Mr Annan's Jerusalem talks followed a visit to Lebanon as part of a regional tour aimed at bolstering the truce between Israel and Hezbollah.
Mr Annan and Mr Olmert also discussed the deployment of UN troops in Lebanon.
The UN chief said he hoped Israel would withdraw from southern Lebanon once 5,000 UN peacekeepers were on the ground "in the coming days and weeks".
The UN resolution which led to the 14 August ceasefire calls for a 15,000-strong force - significantly larger than its current size of about 2,500.
UN TROOP PLEDGES
France: Leadership and 2,000 troops
Italy: 2,500-3,000 troops
Bangladesh: Two battalions (up to 2,000 troops)
Malaysia: One battalion
Spain: One mechanised battalion
Indonesia: One battalion, an engineering company
Nepal: One battalion
Denmark: At least two ships
Poland: 500 troops
Finland: 250 troops
Belgium: 302 troops, later rising to 392
Germany: Maritime and border patrols but no combat troops
Norway: 100 soldiers
The BBC's Jill McGivering, in Jerusalem, said Mr Annan and Mr Olmert emerged from their meeting with little sign of the gap between them having narrowed.
Mr Annan said the blockade should be lifted to help Lebanon recover from the month-long conflict.
But Mr Olmert said only that Israel would pull out of the Lebanon once UN resolution 1701 was implemented.
"[The resolution] is not a buffet where you pick up one item and leave others," he said.
"So far as we're concerned we entirely accept this, this is a fixed buffet and everything will be implemented including the lifting of the blockade as part of an entire implementation of the different articles."
Mr Olmert said unless two Israeli soldiers captured by Hezbollah on 12 July were freed, the UN resolution "cannot be considered as fully implemented".
Among other measures, the resolution calls for the deployment of Unifil [United Nations Interim Force in Lebanon] and Lebanese army forces in the south, as well as the disarmament of all armed groups in Lebanon.
Our correspondent says that although the relationship between Israel and the UN has been chequered, this time they are committed to the same goals - a secure, stable Lebanon.
But finding agreement along the way is not proving easy, our correspondent says.
Mr Olmert said he hoped the ceasefire would ultimately lead to a peace deal between Israel and Lebanon.
But Lebanese Prime Minister Fouad Siniora all but ruled out relations between the two countries.
"Lebanon will be the last Arab country that could sign a peace agreement with Israel," he said.
Mr Annan also appealed for the "unambiguous and unconditional release" of the two Israeli soldiers whose capture sparked the Israeli offensive.
Mr Annan said he discussed their fate with a Hezbollah MP in Lebanon on Tuesday.
"I believe they are alive," he said.
After his talks in Israel, Mr Annan flew to the West Bank for talks with Palestinian Authority President Mahmoud Abbas.
At a joint press conference with the Palestinian leader in Ramallah, Mr Annan said that more than 200 Palestinians had been killed since the end of June, and the violence had to stop.
"I have made my feelings known in talks with Israeli officials," Mr Annan said. "Beyond preserving life, we have to sustain life. The closure of Gaza must be lifted, the crossing points must be opened, not just to allow goods in but to allow Palestinian exports out as well."
He said that he had also spoken to Mr Abbas about the ongoing efforts to secure the release of the captured Israeli soldier Gilad Shalit, to bring about a cessation of Palestinian attacks on Israel, as well as the long-running issue of Palestinian prisoners in Israel.
Mr Annan has now arrived in Jordan for talks with King Abdullah II.