Lebanon Crisis

Where to now for Israil, Syria, and Iran?

Ben Faulks, London-based analyst for Eurasia Group

Despite the initial ferocity of the violence in southern Lebanon, no nation state wants to see the Israeli-Hizbullah confrontation escalate into a regional war. Energy and other markets priced in the conflict within days, assuming that it will remain contained – and this is the most likely outcome. But there is no end in sight to the violence. Israel is facing a more determined and effective foe in Hizbullah than it anticipated. If Israel fails to achieve its goal of at least severely constraining Hizbullah's operational capacity, it may push deeper into Lebanese territory and intensify its aerial bombardment. That would raise the risk of the conflict sucking in Syria and possibly even Iran, carrying severe implications for energy prices.

The first two weeks of conflict in southern Lebanon resulted in the death of 600 people – overwhelmingly Lebanese civilians – set post civil war reconstruction back years, displaced some 600,000 Lebanese, raised sectarian tensions within the country and stoked anti-Israeli and anti-US sentiment throughout the region and beyond. But there remains little appetite for an escalation of the conflict beyond Lebanon's borders. The US and Israel have pointed the finger at both Syria and Iran, Hizbullah's sponsors, for precipitating the crisis. It is impossible to know what role Syria and Iran played. Certainly, a case can be made that both stood to benefit: the crisis makes Syrian influence in Lebanon relevant once more after its humiliating withdrawal in 2005; Iranian hardliners, determined to achieve nuclear weapons capability, may have seen this as an opportunity to showcase Iran's regional reach, as a deterrent to those seeking to strong-arm it into giving up the nuclear fuel cycle. At the very least it is difficult to imagine Hizbullah would have acted against the express wishes of either Iran or Syria. What is clear, though, is that neither Iran nor Syria wants to escalate the situation.

The Syrian regime has played out a proxy war with Israel for decades, but knows its army would be crushed in days in a conventional war with its southern neighbour and "regime change" would surely follow. Iran will engage in brinkmanship but its leadership is also, ultimately, concerned with its own survival. It knows the risks implicit in conflict and wants, if possible, to achieve its nuclear deterrent without a war. For their part neither the US nor Israel wants to see the Syrian government collapse. Despite the Syrian regime's record of exploitation and brutality in Lebanon, headlined by strong suspicions that it was behind the assassination of the former prime minister Rafiq Hariri, the collapse of the regime of President Bashar Al-Assad raises prospects of a far more alarming outcome – namely a power vacuum that will turn Syria into a magnet for militant Islamists seeking to join the fight against the US in Iraq or to take pot shots at Israel, or worse, Islamist domination.

But there is no sign of an end to the conflict. Israel is facing a far tougher task than it anticipated in crippling Hizbullah's military capabilities. Hizbullah has proven to be better armed than expected. Hizbullah's support among the Shia who populate the south of Lebanon is unquestionably strong, allowing it to meld into the civilian population and affording it enormous flexibility. The aerial bombardment is delivering diminishing returns for Israel, forcing it to challenge Hizbullah in guerrilla warfare, on alien terrain, whereits technological superiority is at least partially neutered. Israel will undoubtedly face a mounting casualty toll from such combat. Moreover, the scale of Lebanese civilian casualties risks playing into Hizbullah's hands – allowing it to paint itself as a defender of a national cause.

Short of military destruction, it is difficult to see how Hizbullah can be completely put out of business. Israel wants to see the implementation of UN Resolution 1559 of 2004 that calls for the extension of Lebanese government control over the entire country and the disarming of Lebanese militia – primarily Hizbullah. The US, EU and US-allied Sunni Arab regimes broadly concur. A multinational conference held in Rome on 26 July agreed that a force under a UN mandate should be deployed in southern Lebanon to facilitate Lebanese government control. But Hizbullah will not accept a plan that threatens its very existence, even if it involves Israel ceding to Lebanese claims of ownership of the disputed Shebaa Farms – which does not seem likely. Another way out may be to offer some kind of dispensation to Syria and Iran which fund and arm the movement. But there is little prospect of the US sanctioning such talks, let alone offering an inducement of the magnitude required for Iran and Syria to drop their support for Hizbullah. Without at minimum a cease-fire, a UN force will not be deployed because of the severe risk that it will be caught up in a maelstrom.

Israel seems likely therefore to face three choices: to get sucked into a protracted guerrilla war in the south of Lebanon that incurs mounting casualties – with the added risk that the conflict could suck in jihadis from elsewhere in the region; to accept a truce that forces it to accept the prisoner swaps that it has so far ruled out and leaves Hizbullah with a greater military capacity than it intended; or to escalate its military campaign in an effort to definitively destroy Hizbullah. The likelihood is that Israel will settle for damaging, but not totally incapacitating, Hizbullah's military capacity – albeit temporarily, before the inevitable reinforcements arrive. Israel will probably judge that escalation poses greater risks. But it is possible that Tel Aviv may feel compelled to escalate the conflict markedly. This may occur if domestic Israeli public opinion cannot tolerate a prolonged battle with severe losses but is not satisfied with the truce on offer – primarily for fear that Hizbullah will in due course emerge a more potent force, able to cause it increased damage, particularly in the context of a showdown over Iran's nuclear program. If Hizbullah began to launch missile strikes at Tel Aviv, Israel would also surely escalate its military campaign. Little is definitively known of the extent or sophistication of Hizbullah's missile arsenal, but it is widely believed to possess Iranian-supplied missiles that can travel further than Haifa – the most distant target hit at the time of writing.

An escalation of Israel's military campaign should cause energy markets to stir as it would increase the possibility of Syria, and most alarmingly, Iran being drawn in. Syria has made clear that any Israeli land troop incursion into the Bekaa Valley – 20 minutes from Damascus – would invite a military response. Israel would probably opt instead for a hugely intensified aerial bombardment, but this would kill many more civilians, raising the risk that Hizbullah would respond with more dramatic steps, including, if it retained the capacity, missile attacks deeper into Israeli territory. A third possibility is that Israel could attempt to coerce Damascus into reeling in its protégé by strikes in Syria calibrated to frighten but not destabilize the Assad regime. While Damascus would shy away from conventional confrontation with Israel, Iran has made a highly public show of solidarity with Syria, warning strongly against any aggression there. Iran would also be reluctant to engage in a conventional war which it could not win, but may leverage its influence elsewhere, notably among the Iraqi Shia. The ultimate risk – slim at this stage – is that the US and Israel conclude that Iran is the nub of the problem: given that the prospects of persuading Tehran to give up its fuel cycle capacity seem slender, Washington and Tel Aviv may conclude that military action against Iran – already under consideration – is a must.