Can Hezbollah win the peace?

The fragile ceasefire appears to be holding in Lebanon, but the compromise UN resolution has left many issues still unresolved.

After a month of war, a fragile ceasefire, mandated by UN Security Council Resolution 1701, is holding in Lebanon and people are returning to the bombed remains of their villages in the south of the country. The compromise resolution calls for the disarming of Hezbollah, but leaves open the question of how this will be achieved and who will ensure the militant group stays out of the south, where its rockets were launched. Meanwhile, neither side looks a clear winner: Hezbollah's casualties will be high, says The Guardian, while many of its bases and munitions stockpiles have been destroyed. And Israel's ferocious bombardment has neither destroyed Hezbollah nor turned Lebanese public opinion against it, says if anything Hezbollah has even more public support than before.

Hezbollah's new-found clout has come at a staggering cost to Lebanon's infrastructure, economy and civilians, says The Los Angeles Times. Lebanon's Council of Development and Reconstruction put bomb damage at $2.5bn at the end of July, but worse damage was subsequently inflicted when major road bridges were destroyed; now it is estimated that reconstruction alone could cost $7bn. Economists have cut 2006 growth targets to zero or less from 5%-6%. The "brave and enterprising" Lebanese have managed to rebuild Beirut in a decade following 18 years of civil war, notes Chris Walker in The Independent on Sunday; foreign investment also helped revive the erstwhile Paris of the East'. Their work has been pulverised in just four weeks. "In trying to find a needle, Israel has burnt the haystack."

But Hezbollah's new strength may be challenged when it comes to rebuilding the economy. As The Guardian points out, even the help of Iran may not suffice to rebuild southern Lebanon's shattered economy and the welfare state that supports its Shia constituency. If other parties, such the Lebanese government, the Europeans and international agencies are involved in the reconstruction, Hezbollah could see its control of the southern part of Lebanon leach away as "the lines of patronage and control" become blurred. Shored up by war, Hezbollah's support may yet be weakened by peace.

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For more on what the recent conflict will mean for the Lebanese economy, see: War wil spark economic crisis in Lebanon; and what Lebanon means for the world economy.