Israel began slowly pulling out forces from southern Lebanon and made plans to hand over territory yesterday - on the first full day of a tense cease-fire tested by skirmishes.
But Israeli and Hezbollah forces held their ground and raised hopes the UN-imposed pact could stick.
Hezbollah guerrillas fired at least ten rockets in southern Lebanon, but none crossed into Israel.
On Monday, at least six Hezbollah militiamen were killed by Israeli troops waiting for a peacekeeping force before a full-scale withdrawal.
Lebanon was under intense international pressure to get soldiers moving south into Hezbollah territory - a key element in the UN Security Council plan to end the 34-day conflict that claimed more than 950 lives.
Lebanon's defence minister, Elias Murr, said Lebanon's contribution of 15,000 soldiers could be on the north side of the Litani River by the end of the week.
But they still must cross the river and try to enforce the central government's control over Hezbollah areas for the first time in decades.
In Jerusalem, Israeli army officials said they planned to begin handing over captured positions today and hoped to complete a withdrawal by next week.
The plans for territory to change hands shows the complexity of the border zone: Israel transferring it to the UN force which turns it over to Lebanese envoys.
The Israeli army, meanwhile, said it had already begun thinning out forces in Lebanon, but did not give figures. During a final offensive, 30,000 Israeli soldiers were believed to be in southern Lebanon.
The Security Council blueprint calls for Lebanese forces to join with 15,000 soldiers in a strengthened UN-backed military mission. Their job would be to patrol a 18-mile buffer zone from the Litani River to the Israeli border.
Murr said "there will be no other weapons or military presence than the army" after Lebanese troops move south of the Litani.
But he said the army would not ask Hezbollah to hand over weapons - an extremely volatile issue no one is yet ready to touch.
Cars loaded down with salvaged possessions began pouring into the area just hours after the truce took effect on Monday morning. As they took stock of the wreck-age, more refugees were expected to pour in from Syria, Cyprus and other havens during the war.
Israel said it would continue its blockade of Lebanese ports but was no longer threatening to shoot any car that moved on roads south of the Litani.
On Monday, both Israel and its main backer, the United States, portrayed Hezbollah as the loser - and by extension, its main backers, Iran and Syria. "There's going to be a new power in the south of Lebanon," Bush said.
But Hezbollah leader, Sheikh Hassan Nasrallah, claimed a "strategic, historic victory".
Much of the Arab and Muslim worlds would agree. Hezbollah's ability to withstand the vastly superior Israeli military, and hit back with deadly ambushes and cross-border rocket volleys, has given it heroic stature.