At the start of a regional tour to underpin a fragile truce between Israel and Hezbollah, Mr Annan said that the United Nations was also ready to assist in an exchange of prisoners.
"We are working for the lifting of the siege, I am discussing it with the
Israeli authorities tomorrow, I hope there will be some movements on this in the not-too-distant future," he said.
He said the blockade would be one of the first items on his agenda when he visits Israel on Tuesday.
UN peacekeeping force
The French military said a 900-man French battalion equipped with 13 tanks and heavy artillery would arrive in south Lebanon by mid-September to beef-up the international force.
The battalion - part of France's 2,000-strong overall contribution to the UN force - will include 13 Leclerc heavy tanks, 155-millimetre canons, and two mechanised infantry units, the French armed forces chief of staff said.
Earlier, Italy gave a green light for its contribution to the expanded UN force, a senior official said in Rome, with a total of 2,500 troops expected.
In New York, countries committed to the beefed-up peacekeeping force were to meet at the UN after Turkey also said it was ready to send troops.
"We will have about 30 countries taking part, including the European countries which signaled their intention to participate in the force Friday," UN spokesman Stephane Dujarric said.
Israel asks for German help
Israeli Foreign Minister Tzipi Livni also called on Germany to use its influence with the Lebanese government to help secure the release of two of its soldiers snatched by Hezbollah last month.
"We expect everyone, of course also Germany, to approach Lebanese Prime Minister (Fuad) Siniora and to call on him to take some responsibility and to work for the release of the kidnapped soldiers," she told public television ARD.
Germany, she noted, "has already played an important role in the past in negotiations with Hezbollah".
Foreign minister Livni is on a three-day visit to Germany.
After talks with Ms Livni, German Foreign Minister Frank-Walter Steinmeier dismissed an Egyptian report that Berlin had brokered a deal between Israel and Hezbollah for a prisoner swap, saying Germany was playing no part in any such negotiations.
Germany clinched a January 2004 deal that saw Israel exchange 429 Arab prisoners for the release of an Israeli businessman captured by Hezbollah and the remains of three soldiers.
Annan calls for release
During the start of his regional tour, Mr Annan also called on Hezbollah to release two Israeli soldiers to the International Committee of the Red Cross (ICRC) or Lebanese authorities.
Mr Annan met Prime Minister Fuad Siniora, parliament speaker Nabih Berri - a close ally of Shiite militant group Hezbollah - and other politicians.
"We are entering the stage of recovery and reconstruction, we have a chance to have a long-term ceasefire," Mr Annan said after meeting Mr Berri.
Mr Berri said their talks focused on the crippling Israeli air and naval blockade on Lebanon which he claimed had violated the UN-brokered truce, while insisting that Lebanon had fully respected the ceasefire terms.
UN Security Council Resolution 1701 framed a ceasefire between Israel and Hezbollah on August 14 after 34 days of bitter fighting.
Mr Annan called for the full implementation of the terms of the resolution, chiefly an Israeli pullout from southern Lebanon and a deployment of the Lebanese army and reinforced UN peacekeepers in the area.
Mr Annan later toured devastated southern Beirut and laid a wreath at the tomb of slain ex-prime minister Rafiq Hariri whose death in February 2005 sparked protests that led to the departure of Syrian troops from Lebanon.
During Mr Annan's tour he is also to visit Israel, the Palestinian territories, Jordan and Syria. He is expected in Iran on Saturday for talks on Tehran's standoff with the West over its nuclear program.
Olmert announces inquiry
Meanwhile in Israel, Prime Minister Ehud Olmert ordered a government inquiry into the conduct of Lebanon war, for the first time admitting failures during the offensive.
But the embattled premier refused to back calls for the most sweeping type of public inquiry - a state commission - which he said would paralyse the leadership at a time when Israel needed to be prepare for a threat from Iran.
Instead, he authorised a less far reaching investigation, to be headed by a former head of the Mossad spy agency.
In a televised speech to the nation, Mr Olmert reminded the Israeli public that the threat of Iran was still present, and said Israel did not have the luxury of a detailed investigation of its past conduct.
"Everyone knows that that is not what will fix the problems, it is not what will prevent breakdowns" he said.
"What we need is a businesslike, professional investigation that gets to the root of the issue that reaches conclusions, that learns lessons."
Speaking in the northern Israeli city of Haifa, Mr Olmert also defended his decision to authorise a last-minute ground offensive in Lebanon, despite the casualties suffered by Israeli forces.
Thirty-three Israeli soldiers were killed in the offensive, which was launched even as a UN ceasefire agreement was in the making.
Mr Olmert said the offensive helped push the ceasefire through the United Nations.
Militants killed
The Palestinian security service says two local chiefs of the Al Aqsa Martyrs Brigades have been killed in an exchange of gunfire with Israeli troops at the Balata refugee camp in the West Bank town of Nablus.
The militants were killed after Israeli soldiers had surrounded the house in which they were located.
Three other people were wounded in the exchange of gunfire, including another member of the armed wing of Palestinian President Mahmud Abbas' Fatah movement who suffered severe injuries.