Israel-Hamas-Hezbollah: The Current Conflict

Lebanon: The Israel-Hamas-Hezbollah Conflict
Updated September 15, 2006
Jeremy M. Sharp, Coordinator
Foreign Affairs, Defense, and Trade Division
Christopher Blanchard, Kenneth Katzman, Carol Migdalovitz,
Alfred Prados, Paul Gallis, Dianne Rennack, John Rollins,
Steve Bowman, and Connie Veillette
Foreign Affairs, Defense, and Trade Division

Lebanon: The Israel-Hamas-Hezbollah Conflict
This report analyzes the conflict between Israel and two U.S. State Department-
designated Foreign Terrorist Organizations (FTOs), the Lebanese Shiite Muslim
group Hezbollah and the radical Palestinian Hamas organization. On July 12, 2006,
what had been a localized conflict between Israel and Palestinian militants in the
Gaza Strip instantly became a regional conflagration after Hezbollah captured two
Israeli soldiers in a surprise attack along the Israeli-Lebanese border. Israel
responded by carrying out air strikes against suspected Hezbollah targets in Lebanon,
and Hezbollah countered with rocket attacks against cities and towns in northern
Israel. In order to push Hezbollah back from its border, Israel launched a full-scale
ground operation in Lebanon with the hopes of establishing a security zone free of
Hezbollah militants. Meanwhile, Israeli clashes with Hamas and other Palestinian
militants have continued in the Gaza Strip.
A United Nations-brokered cease-fire came into effect on August 14, 2006.
Based on United Nations Security Council Resolution 1701 passed a few days earlier,
the cease-fire is intended to be monitored by the Lebanese Armed Forces in
conjunction with an expanded U.N. peacekeeping force in Lebanon. The international
community initially hesitated to contribute troops, though it appears now that enough
countries have stepped forward to significantly expand the existing U.N. force
On July 18, 2006, the Senate passed S.Res. 534, which, among other things,
calls for the release of Israeli soldiers who are being held captive by Hezbollah or
Hamas; condemns the governments of Iran and Syria for their continued support for
Hezbollah and Hamas; urges all sides to protect innocent civilian life and
infrastructure; and strongly supports the use of all diplomatic means available to free
the captured Israeli soldiers. On July 20, 2006, the House passed H.Res. 921, which
also condemns Hezbollah’s attack on Israel and urges the President to bring sanctions
against the governments of Syria and Iran for their alleged sponsorship of Hezbollah.
The extension of the Israeli-Palestinian conflict into the Lebanese arena created
a multifaceted crisis that cut across a number of U.S. policy issues in the Middle
East. This report provides an assessment of the month-long war and its implications
for regional stability and other key U.S. policy issues. This report will be updated
periodically. A number of CRS analysts have contributed to this report. For
additional questions, please contact the individual specialist listed under each section
of the report. For more information on the major countries in the current conflict,
please see CRS Report RL33476, Israel: Background and Relations with the United
States; CRS Report RL33509, Lebanon; CRS Report RL33487, Syria: U.S. Relations
and Bilateral Issues; CRS Report RL32048, Iran: U.S. Concerns and Policy
Responses; and CRS Report RL33530, Israeli-Arab Negotiations: Background,
Related Developments, and U.S. Policy.

In troduction ......................................................1
A Multi-Dimensional Conflict....................................1
The “Root Causes” of the Conflict................................1
The Cease-Fire....................................................4
U.N. Security Council Resolution 1701.............................4
An Expanded UNIFIL......................................4
Lebanese Armed Forces.....................................5
Unresolved Issues.............................................5
The Difficulty of Disarming Hezbollah.........................5
Release of Prisoners........................................6
Continued Fighting in Gaza..................................7
Shib’a (Shebaa) Farms......................................8
The War’s Aftermath..............................................10
Assessing Hezbollah..........................................10
Debate Within Israel..........................................11
Domestic Political Repercussions in Israel.....................13
The Race to Rebuild Lebanon...................................14
The War’s Impact on Lebanese Internal Politics.....................16
Issues for U.S. Policy and Congress..................................19
U.S. Foreign Assistance to the Middle East.........................19
Israel’s Loan Guarantees...................................19
Lebanon ................................................20
Humanitarian Issues...........................................20
Condemning Hezbollah....................................20
Israel’s Use of Cluster Weapons.............................21
Israeli Reaction..........................................22
Administration Response...................................22
Congressional Responses...................................23
U.S. Efforts and Other Efforts to Combat Hezbollah.................24
U.S. Terrorism Designations and Related Effects................24
Recent Al-Manar Related Activity in the United States...........24
U.S. and Israeli Action Against Hezbollah Finances..............25
Al-Manar: Hezbollah’s Satellite Television Station..............26
Islam, Al Qaeda, and the Global War on Terrorism..................26
Conclusion ......................................................28
Appendix A: Prelude to the Crisis....................................31
Appendix B: Chronology of Conflict on the Israeli-Lebanese-Syrian Border..36
Appendix C: Recent Legislation.....................................38
Congressional Oversight.......................................38
Evacuation Costs for U.S. Citizens...............................40

Appendix D: U.S. Sanctions .......................................42
Iran ....................................................42
Syria ...................................................43
Lebanon ................................................43
Hamas and Hezbollah.....................................44
List of Figures
Figure 1. Map of Lebanon, Israel, the Gaza Strip, and the West Bank.........3
List of Tables
Table 1. International Contributions to UNIFIL Peacekeeping Force.........5
Table 2. International Contributions to Rebuilding Lebanon...............16

Lebanon: The Israel-Hamas-
Hezbollah Conflict
A Multi-Dimensional Conflict1
Hezbollah’s2 July 12, 2006, attack in northern Israel, in which two Israeli
soldiers were kidnapped, elicited an Israeli military response that again embroiled the
region in a multi-dimensional conflict. The month-long war touched upon an array
of critical U.S. foreign policy issues in the Middle East, ranging from the continued
instability arising from the lack of a comprehensive settlement to the Arab-Israeli
peace process, to the preservation of Lebanon’s sovereignty and independence which
remains hampered by the inability to disarm Hezbollah. Though the primary
combatants were part of a triangular dynamic in which Israel was (and still is) at war
with Hezbollah in Lebanon and with Palestinian militants, including Hamas, in the
Gaza Strip, there were secondary players who added additional layers of complexity
to the conflict, namely Iran and Syria.3 Both countries have played significant roles
in arming, training, and financing Hezbollah (and to a lesser extent Hamas) and have
used the Lebanese Shiite organization as a proxy to further their own goals in the
region. Iran may have aspirations to become the dominant power in the Middle East,
and many in the international community are closely focused on its potential weapons
of mass destruction capability. In this light, the fighting in southern Lebanon was
viewed by some as a contest between two of the Middle East’s most bitter rivals and
most powerful actors, Israel and Iran (via Hezbollah by proxy), and it could be a
harbinger of future indirect confrontations between two possibly nuclear-armed
The “Root Causes” of the Conflict
Hezbollah’s July 2006 attack inside Israeli territory and repeated Israeli-
Palestinian clashes in the Gaza Strip and West Bank illustrated not only the risk
posed by terrorist groups operating along Israel’s borders, but more importantly, the
risk to regional security in the absence of comprehensive peace agreements between

1 Prepared by Jeremy M. Sharp, Analyst in Middle East Policy.
2 For the purposes of this report, “Hezbollah” is used in referring to the Lebanese Shiite
Muslim group. Common alternate spellings include Hizballah, Hizbullah, and Hizb`allah.
3 There also are tertiary actors with an interest in the war in Lebanon. The European Union,
other Arab states, and the United Nations all have been closely involved in trying to resolve
the crisis.

Israel and the Palestinians, Lebanon, and Syria. Particularly along Israel’s northern
front, achieving peace between the major parties has been an elusive goal. The task
has grown even more complex with the rising influence of non-state political
movements/terrorist organizations, such as Hezbollah and Hamas, on Lebanon’s
southern border. Neither organization recognizes Israel’s right to exist as a nation-
The 2006 war in Lebanon is the latest manifestation of conflict along the Israeli-
Lebanese-Syrian border, the final demarcation of which has long been in dispute and
is exacerbated by the technical/formal state of war (not active) that exists between
Israel and its two northern neighbors. On the Lebanese side of the border, historically
weak, usually Christian/Sunni-led governments paid scant attention to the southern
portion of the country, a predominately Shiite area. Without much of an economy or
government military presence in the south, the region was prone to penetration by
outside groups (mainly Palestinian) opposed to Israel until the Shiites residing there
formed their own militias. Since the earliest days of Jewish settlement in what was
then the British-controlled Palestine-Mandate, militants could operate with impunity
over a porous border. Before Hezbollah came on the scene, the Palestinian Liberation
Organization (PLO) used Lebanon as a base to wage a guerrilla war against Israel.
Repeated PLO-Israeli clashes in Lebanon helped ignite the 15-year long Lebanese
civil war. To eliminate the PLO threat from its border, Israel occupied a buffer zone
in southern Lebanon for 18 years, a policy which many observers believe accelerated
the politicization of Lebanese Shiites there and, with significant assistance from Iran,
led to the creation of Hezbollah.4
Today, with the PLO long expelled from Lebanon and the Syrian armed forces
no longer in Lebanon and at a major technological disadvantage vis-à-vis Israel’s
conventional forces, it is Hezbollah that has stepped in to fill the power vacuum in
southern Lebanon and continue to threaten Israel with the full support of its foreign
patrons - Syria and Iran. Syria seeks the return of the Golan Height which it lost to
Israel in the June 1967 Six Day War and finds non-state groups like Hezbollah and
other Palestinian terrorist organizations based in Damascus as useful proxies. Most
analysts believe the Israeli-Lebanese-Syrian tri-border area will remain a tinderbox
that could spark future conflicts so long as territorial disputes remain unresolved.
While Syria and Israel have at times come close to an agreement, most recently in
1999, significant differences between the two sides remain, notably control over the
shores of the Sea of Galilee, a critical source of fresh water with symbolic importance
as well for both countries.

4 For an account of the creation of Hezbollah and the role of Iran see, Magnus Ranstorp,
Hizbollah in Lebanon, St. Martin’s Press, 1997, pp. 30-40.

Figure 1. Map of Lebanon, Israel, the Gaza Strip, and the West Bank

The Cease-Fire
U.N. Security Council Resolution 17015
After more than four weeks of fighting between Israel and the Lebanese Shiite
Muslim militia Hezbollah, on August 11, 2006 the U.N. Security Council
unanimously adopted Resolution 1701, calling for a “full cessation of hostilities
based upon, in particular, the immediate cessation by Hezbollah of all attacks and the
immediate cessation by Israel of all offensive military operations.” The resolution
provides: expansion of the existing U.N. Interim Force in Lebanon (UNIFIL) from

2,000 to a maximum of 15,000; deployment of UNIFIL plus a Lebanese Army force6

to southern Lebanon to monitor the cease-fire; withdrawal of Israeli forces in
southern Lebanon “in parallel” with the deployment of U.N. and Lebanese forces to
the south; a ban on delivery of weapons to “any entity or individual” in Lebanon,
except the Lebanese Army. The resolution requested the U.N. Secretary General to
develop proposals within 30 days for delineation of Lebanon’s international borders,
including the disputed Shib’a Farms enclave located near the Lebanese-Syrian-Israeli
tri-border area. The resolution’s preamble also emphasizes the need to address the
issue of prisoners on both sides The resolution also calls upon the international
community to extend financial and humanitarian assistance to the Lebanese people,
including facilitating safe return of displaced persons.
The agreement entered into force on August 14. Factors critical to the
effectiveness of the peacekeeping measures adopted by Resolution 1701 and the
likelihood of a sustainable cease-fire include acceptance of the arrangements by
Israel, Hezbollah, and the Lebanese population; training and motivation of
peacekeeping forces; rules of engagement that allow for a military response to
challenges; and cooperation among the various organizations involved in
peacekeeping under Resolution 1701.
An Expanded UNIFIL. The U.N. Interim Force in Lebanon (UNIFIL), created
in 1978 initially to monitor an earlier Israeli withdrawal, has fluctuated in size over
the years, comprising approximately 2,000 military personnel as of mid-2006. As
noted above, Resolution 1701 envisions increasing UNIFIL to a maximum of 15,000,
of which approximately 7,000 would come from Italy, France, Spain, and other
European countries. Turkey and Qatar have agreed to participate, thus providing
Arab/Muslim representation and Indonesia has been approached as well. U.N.
planners are hopeful that more Arab or at least other Muslim forces may participate
as well to broaden support for UNIFIL. There has been talk of deploying the the
expanded UNIFIL not only in southern Lebanon but also along the Syrian-Lebanese
border. Syria objects to this proposal as a hostile act. (See below.)

5 Prepared by Alfred Prados, Specialist in Middle Eastern Affairs.
6 The Lebanese Prime Minister offered to deploy 15,000 military personnel. (See below.)

Table 1. International Contributions to
UNIFIL Peacekeeping Force
CountryTroop Pledges
Italy 3 ,000
Germany2,400 (exclusively for naval patrol)
France 1,800-2,200
Sp ain 1 ,000-1,200
T urkey 1,000
Indonesia 500-1,000
Poland 500
B e lgium 3 0 0
Qatar 250-300
Finland 250
*Others ( Sweden, Greece, Denmark, Britain,)Offered ships, naval assets,engineers, and aircraft
Totals: 11,00-12,150 est.
W/ Existing UNIFIL Force (2,000)13,000 -14,150 est.
Source: Troop figures are only estimates based on media reports; not all of these are firm
*Some countries, such as Russia, are sending troops and rebuilding teams to Lebanon independent
of the U.N. peacekeeping mission there.
Lebanese Armed Forces. Resolution 1701 also welcomes a decision by the
Lebanese Government to deploy 15,000 personnel from the Lebanese Armed Forces
to southern Lebanon as the Israeli forces withdraw. There are questions, however,
about the likely effectiveness of Lebanese troops in maintaining stability. The
70,000-member Lebanese Armed Forces have limited capabilities and largely
obsolescent equipment. Moreover, they are divided along religious sectarian lines,
although Lebanon’s leaders have tried in recent years to build a professional and
more integrated force. Although the government does not release figures on the
sectarian composition of the Lebanese Armed Forces, according to former Lebanese
army general Elias Hanna, the army’s officer corps is predominantly Christian and7
Sunni Muslim while the rank and file is about 70% Shiite. Deployment of Lebanese
military contingents could help break the deadlock over monitoring the Lebanese-
Syrian border, however, since the various parties have not objected to the presence
of Lebanese troops.
Unresolved Issues
The Difficulty of Disarming Hezbollah. Some analysts believe that
Resolution 1701, while it may succeed in creating a temporary calm and end to the
fighting, will probably fail to change the fundamental political and military dynamics

7 “Lebanese Armed Forces May Play Bigger Role in War,”USA Today, August 2, 2006.

on the ground that started the war in the first place — the presence of a well-armed
Hezbollah militia on Israel’s borders. Although Resolution 1701 calls for an
expanded UNIFIL, it will not be operating in accordance with Chapter VII of the UN
Charter, which allows the Security Council to “take such action by air, sea, or land
forces as may be necessary to maintain or restore international peace and security.”
According to U.S. Secretary of State Condoleezza Rice, “I don’t think there is an
expectation that this [UN] force is going to physically disarm Hezbollah.... I think it’s
a little bit of a misreading about how you disarm a militia. You have to have a plan,
first of all, for the disarmament of the militia, and then the hope is that some people
lay down their arms voluntarily.”
While Israel has demanded that peacekeepers be deployed along the Lebanese-
Syrian border to prevent Hezbollah’s re-armament by Syria and Iran, Lebanese Prime
Minister Fouad Siniora stated on August 28, 2006 that the Lebanese Armed Forces
have already been deployed along the border and that there is no need for an
international presence there. Syria’s President Bashar al-Asad had threatened earlier
to close the border should peacekeepers take up positions close to Syria. In an
interview with Dubai television, Asad stated that a possible peacekeeping force along
the border “ is an infringement on Lebanese sovereignty and a hostile position.” Most
analysts believe that the Lebanese army can do little to prevent the smuggling of arms
to Hezbollah.
Release of Prisoners.8 International mediators have been working through
diplomatic channels to free the Israeli corporal kidnapped by the Hamas military
wing and two other groups on June 25 almost from that date. The kidnappers and
their supporters have insisted that the Israeli soldier be exchanged for some of the
thousands of Palestinian prisoners being held by Israel. Although the kidnappers
initially and specifically demanded the release of women and minors in Israeli
custody, their subsequent demands have been less precise. The mediators’ efforts
have been hampered by Hamas’s demand (specifically Damascus-based Hamas
Political Bureau Chief Khalid al-Mish’al’s demand) for a simultaneous prisoner swap
and by Israel’s reluctance to agree to any actions that would appear to be an exchange
or a concession to the “blackmail” of kidnapings. Egyptian officials are said to be
mediating and there are unconfirmed reports that a prisoner exchange is in the works.
According to these reports, the soldier would be released and, subsequently,
Palestinian prisoners would be released in three groups, totaling about 800.9 The
Egyptians’ interlocutor is not known. Neither Palestinian President Mahmud Abbas
nor Prime Minister Ismail Haniyah of Hamas is in control of the kidnapped Israeli
soldier. The Hamas military wing may answer to Mish’al, who in turn may need the
approval of his Syrian hosts or Iranian supporters for any deal.

8 Prepared by Carol Migdalovitz, Specialist in Middle Eastern Affairs.
9 “Israeli Sources Confirm Prisoner Exchange Contacts, PM Office Denies Knowledge,”
Yedi’ot Aharonot, September 3, 2006, Open Source Center Document
GMP20060903741001. Before the kidnaping, Israeli Prime Minister Ehud Olmert reportedly
had been considering the release of a substantial number of Palestinian prisoners as a good-
will gesture toward Palestinian President Mahmud Abbas.

U.N. Secretary General Kofi Annan announced on September 5 that Israel and
Hezbollah had agreed to have him mediate an exchange of prisoners for the release
of the two Israeli soldiers kidnapped on the northern border of Israel by Hezbollah
on July 12 and that he would appoint an envoy to conduct “secret” negotiations.
Israeli officials immediately reacted by saying that they would not negotiate a
prisoner release, but they have taken actions which contradict their statements and
indicate that they expect an exchange. In addition to holding several Lebanese
prisoners, one of whom has been in jail as a convicted murderer since 1979, Israeli
forces reportedly captured about a dozen Hezbollah fighters and brought the corpses
of others to Israel during the recent war specifically in order to exchange them for the
captured soldiers after the war.10 Israel has exchanged many Hezbollah prisoners for
a few Israeli captives and corpses via third party mediators on past occasions. While
the current Israeli government would prefer not to follow that precedent and
apparently launched the recent war partly to end it, the captives’ families and much
of the Israeli public demand the return of the abductees, which appears to require an
Continued Fighting in Gaza.11 While fighting continues in the Gaza Strip,
it has abated somewhat in Lebanon since August as rockets have been launched less
frequently. The Israeli Defense Forces have taken over some former settlements in
Gaza and deployed just beyond the Gaza border in order to make sporadic incursions
into Palestinian areas to attack terrorists, rocket launching sites, and tunnels used to
smuggle arms into Gaza. However, their use of air and artillery strikes appears to
have been curtailed somewhat. This may have been due to a shifting of regular
Israeli forces and resources to the northern front against Lebanon and their
replacement by reservists. It is not yet clear if hostilities will re-escalate in Gaza with
the cessation of hostilities in Lebanon. Some 200 Palestinians have been killed since
these operations began after the June 25 kidnaping of an Israeli soldier. A prisoner
exchange might continue to constrain the fighting.
Much of the fighting in Gaza is intramural, i.e., between supporters and
opponents of the Hamas-led government. The well-armed Palestinian security forces,
manned largely by Fatah opponents of the government, have repeatedly confronted
the Hamas military wing and other armed groups loyal to government. Crime rates12
also reportedly have risen. Violence also may be attributed to the dire economic
straits into which Gaza has fallen since the international community and Israel cut the
transfer of funds to the Palestinian Authority (PA) after Hamas assumed leadership
of the PA government in March. Palestinian security forces and other government
employees hold the Hamas-led government responsible for the resulting non-payment
of salaries. Israel also has sealed off the Gaza Strip, only allowing in sufficient
humanitarian aid shipments to stave off a disaster. Thus, the domestic climate is
considered chaotic and highly combustible.

10 Eliot Jager, “For the Good of the Many,” Jerusalem Post, September 5, 2006.
11 Prepared by Carol Migdalovitz, Specialist in Middle Eastern Affairs.
12 Doug Struck, “Israel Siege Leaves Gaza Isolated and Desperate,” The Washington Post,
August 28, 2006.

As a result, pressure was exerted on Hamas to accept President Mahmud Abbas
to form a national unity government in order to allow foreign aid to flow again.
Hamas was reluctant to concede the premiership and insisted that ministries be
distributed in proportion to a party’s strength in parliament, ensuring continued
Hamas domination in the cabinet. It has also firmly resisted the idea of a government
of technocrats. Moreover, Hamas will not accede to the January 2006 demand of the
“Quartet” (United States, United Nations, European Union, and Russia) that it accept
principles of non-violence, recognize Israel, and prior agreements and obligations,
including the Road Map to a two-state solution to the Israeli-Palestinian conflict. If
Hamas is not in a position to compromise, the conditions which produced the
international pressure will not change and violence will likely continue.
Shib’a (Shebaa) Farms.13 A small 10-square-mile enclave near the
Lebanon-Syria-Israel tri-border area known as the Shib’a Farms continues to
exacerbate tensions in southern Lebanon and complicate implementation of cease-fire
terms. Earlier, the withdrawal of Israeli forces from southern Lebanon in May 2000
left several small but sensitive border issues unresolved, including the Shib’a Farms.
Israel did not evacuate this enclave, arguing that it is not Lebanese territory but rather
is part of the Syrian Golan Heights, which Israel occupied in 1967. Lebanon,
supported by Syria, asserted that this territory is part of Lebanon and should have
been evacuated by Israel when the latter abandoned its self-declared security zone in
southern Lebanon in 2000. On June 16, 2000, the U.N. Secretary General informed
the Security Council that the requirement for Israel to withdraw from southern
Lebanon had been met, thereby implying that the Shib’a Farms are not part of14
Lebanon. The Secretary General did point out, however, that the U.N. determination
does not prejudice the rights of Syria and Lebanon to agree on an international
boundary in the future.
Leaders of Hezbollah immediately seized upon the Shib’a Farms issue as
justifying Hezbollah’s refusal to relinquish its weapons, arguing that the weapons
were needed to confront Israel while the latter continued to occupy the Shib’a Farms.
Hizbollah also argued that it was justified in continuing to launch periodic rocket
attacks on Israeli military units in or near the Shib’a Farms area to counter alleged
threats posed by Israeli forces in the area. For the next half-decade, this area
remained a focal point for violence and border violations. Among the more serious
incidents was the seizure by Hezbollah guerrillas in October 2000 of three Israeli
soldiers, whose bodies were handed over to Israel in return for the release of a group
of Hezbollah prisoners in January 2004. This incident, which anticipated the July
2006 kidnaping that triggered the recent Israeli-Hezbollah fighting, was followed by
further unrest, including border violations, Hezbollah attacks by fire (e.g., rocket and
mortar attacks), occasional Israeli air strikes, and frequent Israeli overflights of

13 Prepared by Alfred Prados, Specialist in Middle Eastern Affairs.
14 The U.N. Secretary General noted that the Shib’a Farms comes under the mandate of the
U.N. Disengagement Observer Force (UNDOF), which is monitors the Israeli-occupied
Syrian Golan Heights. UNDOF has no role in Lebanon. For more information, see CRS
Report RL31078, The Shib’a Farms Dispute and Its Implications.

The situation is made more complex by the fact that Syria and Lebanon have
never demarcated a common border nor established formal diplomatic relations. The
two countries, which were twin protectorates under a French “mandate” (trusteeship)
between World Wars I and II, never established diplomatic structures or agreed
boundaries upon graining independence in 1943. This was due in part to the
influence of some factions in both Syria and Lebanon who regarded the two as
properly constituting a single country. Advocates of a “Greater Syria” in particular
were reluctant to establish diplomatic relations and boundaries, fearing that such
steps would imply formal recognition of the separate status of the two states.
The Shib’a Farms emerged into the limelight once again after political
upheavals in Lebanon in 2005 and the fighting that erupted in July 2006. As
government leaders and diplomats sought to find ways to end the fighting and pursue
more lasting peace efforts, it became obvious that the status of the Shib’a Farms
territory would likely arise. At an inconclusive international conference on Lebanon
held in Rome on July 26, Lebanese Prime Minister Fouad Siniora presented a seven-
point proposal which called, among other things, for placing the Shib’a Farms and
some adjacent areas under U.N. jurisdiction “until border delineation and Lebanese
sovereignty over them are fully settled.” The proposal also provided that the Shib’a
Farms would be open to property owners during the period of U.N. custody.
U.N. Security Council Resolution 1701 of August 11, 2006, which brought about
a cessation of active hostilities, did not specifically endorse the seven-point plan and
its proposals for dealing with the Shib’a Farms question. However, in preambular
language, the resolution referred to “the proposals made in the seven point plan
regarding the Shebaa (variant spelling) farms area.” Later on, in paragraph 10, the
resolution requested the U.N. Secretary-General to develop proposals to implement
terms of various agreements including, “delineation of the international borders of
Lebanon, especially in those areas where the border is disputed or uncertain, including
by dealing with the Shebaa farms area [emphasis added], and to present to the Security
Council those proposals within thirty days.” On September 1, 2006, during a follow-
on trip to the region, Secretary-General Annan said Syrian President Bashar al-Asad
informed him that “Syria is prepared to go ahead with the delineation of its border with
Lebanon.” According to the press article that reported the meeting, the process of
delineation could include the Shib’a Farms area.15 At the same time, President Asad
ruled out formal demarcation (as distinguished from delineation) of the Shib’a Farms’
boundaries pending Israeli withdrawal from the area.16
The status of the Shib’a Farms could be an important factor, not only in the
stability of Lebanon but also in any future agreements involving Israel, Lebanon, and
Syria. If the Shib’a Farms area forms part of Lebanese territory occupied by Israel
in 1982, it would come under the provisions of U.N. Resolutions 425 and 426, which
addressed Israeli withdrawal from Lebanon. If it forms a part of the Syrian Golan
Heights territory occupied by Israel in 1967, it would come under the provisions of
other U.N. resolutions (242 and 338), which address the Golan territory and other

15 “Annan says Assad [variant spelling] will respect Hezbollah arms embargo,” AFP News
Wire, September 1, 2006.
16 Interview with Syrian President Bashar al-Asad carried by Dubai TV on August 23, 2006.

broader aspects of the Arab-Israeli conflict. In the latter case, the issue would be
moot as long as Israel remains in occupation of the Golan Heights. For more
background information on the Shib’a Farms issue, see CRS Report RL31078, The
Shib’a Farms Dispute and Its Implications, by Alfred B. Prados.
The War’s Aftermath
Assessing Hezbollah17
The relative success of Hezbollah in the recent conflict can be credited to a
variety of factors. In the six years since the Israeli withdrawal from southern
Lebanon, Hezbollah devoted considerable efforts to constructing an extensive
defensive infrastructure, providing substantial training to its personnel, establishing
distributed stockpiles of supplies throughout the area, and preparing operational
plans. All of these activities are reported to have received a very high level of support
from Iran in the form of funds, equipment, and personnel.18
Perhaps the most significant factor in Hezbollah’s ability to withstand the Israeli
Defense Forces (IDF) is an the extensive network of fortified sites and underground
facilities. These provided protection for both personnel and equipment against
repeated Israeli air attacks, forcing the IDF to move to ground operations. Fighting
from prepared positions and very well equipped with a range of modern weaponry
that included antitank and anti-ship missiles, night vision equipment, and computer
assisted targeting, relatively small Hezbollah units were able to maintain stiffer
resistance than expected. Hezbollah’s stockpiled supplies and local support
significantly mitigated the Israeli interdiction efforts. Though isolated by the IDF air
and ground offensive, Hezbollah units were often sufficiently provisioned to continue
fighting without immediate need for re-supply. Close familiarity with their area of
operations, widespread support among the population, and effective communication
networks enhanced Hezbollah’s ability to slow Israeli advances, often conducting
ambushes and rapidly withdrawing in classic guerrilla style warfare.
Though Hezbollah units did attempt limited incursions into Israeli territory, they
were all successfully repulsed. Nevertheless, throughout the conflict Hezbollah was
able to maintain its campaign of rocket attacks on Israeli territory. An estimated

4,000-5,000 rockets were fired; however, this represents only a third of Hezbollah’s

17 This section was prepared by Steve Bowman, Specialist in National Defense.
18 “Arming of Hezbollah Reveals U.S. and Israeli Blindspots,” The New York Times, July
19, 2006; “Best Guerrilla Force in the World,” The Washington Post, “The Iranian
Connection,” Aviation Week and Space Technology, August 14, 2006. Other sources
include Robin Hughes, “Iran answers Hizbullah call for SAM systems,” Jane’s Defence
Weekly, August 9, 2006; Alon Ben-David, “Iran ‘supplied Zelzal-2 rockets to Hizbullah,’”
Jane’s Defence Weekly, August 16, 2006; Jane’s Terrorism & Security Monitor,
“Hizbullah’s Islamic Resistance,” September 13, 1006.

estimated rocket/missile arsenal.19 Though Israeli retaliation against rocket launch
sites came in a matter of minutes in some cases, the mobility of the rocket launchers
continued to make them difficult targets. The rockets/missiles supplied to Hezbollah
by both Iran and Syria carried a variety of conventional warheads and had ranges of
up to 120 miles. Though most are of relatively low accuracy by modern standards,
they remain effective terror weapons against urban populations.
Though Hezbollah’s military capabilities may have been substantially reduced,
and re-supply from Syria and Iran could be hampered by the presence of international
peacekeepers in Lebanon, Hezbollah’s long-term potential as a guerrilla movement
appears to remain intact. Observers note that Hezbollah’s leaders have been able to
claim a level of “victory” simply by virtue of not having decisively “lost.”
Debate Within Israel20
Israelis overwhelmingly supported the war as a legitimate response to an attack
on sovereign Israeli territory and as a long overdue and decisive reaction to six years
of Hezbollah rocket attacks against northern Israel. As the conflict progressed,
however, the public and media increasingly questioned the government’s and the
military commanders’ prosecution of the war. After the war, critics noted that the
kidnapped soldiers had not been freed and that Hezbollah had retained its arms and
may have been strengthened politically; and they found fault with a government that
had produced what they viewed as poor results. The charges levied against the
government and the military leaders include hesitant decision-making; excessive
reliance on air power; delayed launch of a ground offensive, which, once begun, was
seen as deficient; launching an unnecessary and costly final ground action during the
weekend after the U.N. passed the cease-fire resolution; poor intelligence concerning
Hezbollah locations, arms, tactics, and capabilities; deficient training and equipment
for mobilized reservists; tactics unsuitable for terrain and enemy; ill-prepared home
front defenses, which left many poor and elderly who were unable to escape in the
north; an inadequate presentation of the Israeli view to international audiences; and
harm to future Israeli deterrence.
The government counters that the war succeeded in forcing Hezbollah from the
border and in degrading its arms, particularly in eliminating a substantial number of
its long- and mid-range missiles. It also sees success in forcing the Lebanese
government, aided by international forces, to assert control over the south, which had
been an unfilled demand made by Israel since it withdrew from the region in 2000.
Most notably, Israeli officials took Hezbollah leader Sheikh Hassan Nasrallah’s
admission that he would not have authorized the July 12 action if he had known how

19 “Israeli Commandos Raid Tyre,” USA Today, August 5, 2006; “Hezbollah Launches
Rocket Barrage,” BBC News, August 6, 2006. More recent source: Interview with Under
Secretary of State for Political Affairs Nicholas Burns, “Assessing Hezbollah’s Post-
Conflict Power,” National Public Radio: Morning Edition, August 18, 2006.
20 Prepared by Carol Migdalovitz, Specialist in Middle Eastern Affairs, September 6, 2006.

strongly Israel would react as confirmation that Hezbollah has been weakened and
that Israel’s deterrence has been strengthened.21
Public opinion polls indicate that support for the government has fallen sharply
and that a much of the public favors the resignations of Prime Minister Ehud Olmert,
Defense Minister Amir Peretz, and Israeli Defense Forces (IDF) Chief of Staff Gen.
Dan Halutz.22 Critics claim that Olmert and Peretz’s lack of military command
experience make them unqualified to head the state during a war. Both had held only
low-level positions during required military service, and neither had served beyond
that time. Some critics blame Gen. Halutz, a former head of the air force, for having
made too many appointments to the general staff from the air force and for ignoring
reportedly well-developed plans for a ground campaign. The revelation that Halutz
had engaged in personal stock market transactions in the early hours of the war
sparked additional questions about his priorities.23 Reservists and families of those
killed in action have been in the forefront of demonstrations demanding
However, Prime Minister Olmert rejected demands for an independent state
commission of inquiry, such as were headed by Supreme Court justices after past
controversial conflicts, saying it would take too long and paralyze the military when
it needs to attend to more vital tasks. Instead, he at first named former Mossad
(Institute for Intelligence and Special Operations) Director Nahum Admoni to head
a government investigatory committee to examine wartime decision-making. This
move failed to satisfy critics, who charge that a government-appointed committee
would lack independence and produce a white-wash; and they continued to demand
a state inquiry. Attorney-General Menahem Mazuz then disqualified two of the
Admoni committee’s five members due to conflicts of interests. Olmert also
approved Defense Minister Peretz’s appointment of former Chief of Staff Gen. (Res.)
Ammon Lipkin-Shahak to head a committee to investigate how the military and the
Defense Ministry had performed during the war. Accusations of lack of independence
and white-wash also were made against Lipkin-Shahak, who had advised Peretz
during the war. Lipkin-Shahak suspended his activities and Peretz later came out in
support of a state commission of inquiry. Despite these developments, Olmert
persisted in his efforts to avoid a state commission. On September11, he announced
that, instead of Admoni, retired judge Eliahu Winograd would head a committee to
examine the conduct of both political and military leaders during the war. It will have
two civilian and two retired military members and the power to subpoena witnesses

21 Nasrallah’s August 27, 2006 interview with Lebanon television, cited by Joshua Mitnick,
“Hezbollah Says Its War with Israel Was a Mistake,” Washington Times, August 28, 2006.
22 Dahaf poll results published in “Israel: Majority Favor Inquiry Commission,” Yedi’ot
Aharonot, August 16, 2006, Open Source Center Document GMP 20060816738001.
23 Halutz claims that the stock sale was made before he learned of the kidnapings in northern
Israel. Halutz interview by Sima Qadmon, “Clipped Wings,” Yedi’ot Aharonot, August 18,

2006, Open Source Center Document GMP 20060818738004.

and grant immunity for testimony. In addition, State Comptroller Micha
Lindenstrausse will probe failings in home front preparedness.24
Domestic Political Repercussions in Israel. Politically, support for
Olmert’s Kadima and Peretz’s Labor parties, the two main coalition partners, has
plummeted, while that for the rightist Likud and Yisrael Beiteinu parties and their
respective leaders, Benjamin Netanyahu and Avigdor Lieberman, has increased.
There has been some speculation that the governing coalition might be reconfigured
to bring in one or both of these larger opposition parties, although Olmert professes
to have no interest in change. Lieberman disavows interest in joining the government,
claiming that it will be short-lived. Netanyahu has been less categorical. Few in
parliament, save Lieberman, appear to favor bringing down the government
immediately and in sparking an early election as they have been in their seats only
a few months. Likud has already struck a deal with the government to support the

2007 budget and budget votes have been used as vehicles for producing no-

confidence votes and bringing down a government. Netanyahu may not believe that
he has sufficiently repaired his public image from that of a Finance Minister whose
policies harmed the aged and the poor to contest another election at this time. Such
allegations contributed to Likud’s poor showing in the March 2006 election.
Many Kadima Members of the Knesset (MKs) know that their political fate is
tied to Olmert’s and have a vested interest in his political survival. Hence, he does
not face an imminent challenge to his party leadership, although polls indicate that
Foreign Minister Tzipi Livni is more popular. Kadima had been formed in late 2005
in order to pursue unilateral disengagement from the West Bank. Many Israelis now
believe that unilateral withdrawals from south Lebanon in 2000 and from Gaza in
2005 had transformed those regions into terrorist bases, and neither the public nor
Kadima still supports disengagement from the West Bank. As a result, some
observers say the party lacks a raison d’etre. Olmert has said that rebuilding a north
devastated by the war is his highest priority, but few would consider this goal to be
a new platform for the party.
Amir Peretz is facing greater challenges from within Labor. Since the
government was formed, a block of party dissidents who did not receive cabinet
portfolios have taken every opportunity to criticize their party leader and his actions.
They are led by former Ben Gurion University President Avishay Braverman and
former head of Shin Bet (Israeli counterintelligence and internal security service)
Ami Ayalon, two strong personalities, and their voices have grown louder since the
war. At the present time, the budget process is providing them with ammunition.
Budget cuts to pay for the war are subordinating Labor’s social and economic
agenda; and the proposed 2007 budget contains more of the same. Defense Minister
Peretz is in the awkward position of having to support the military’s demands, while
conceding championship of social causes to his intra-party opposition. As a former
successful union leader who wrested control of Labor from an entrenched old guard,
Peretz’s abilities as an infighter should not be underestimated.

24 Aluf Ben and Yuval Yo’az, “Ex-judge Winograd Tapped to Head Government War
Probe,” Ha’aretz, September 12, 2006.

Most Israeli governments last less than two years. The current government is
not threatened by imminent demise, but many believe it will not survive two years.
The Race to Rebuild Lebanon
While fighting has come to a halt, Iran and Hezbollah are vying with the United
States and its international and Arab partners over which side can help rebuild
southern Lebanon the fastest and win the “hearts and minds” of many distraught
Lebanese civilians who have lost homes and businesses due to the war. Hezbollah
militants and party members, perhaps as an implicit acknowledgment that the war
they began brought much suffering to Lebanon, reportedly have been handing out
$12,000 in cash payments to anyone who lost their home during the war. The money
is meant to pay for rent and furniture while Hezbollah builds new homes for the
displaced. Reportedly, the bulk of Hezbollah’s largesse comes from Iran, which may
have allocated hundreds of millions in aid to be channeled through Hezbollah to
Lebanon.25 According to the governor of Lebanon’s Central Bank, Hezbollah was
distributing banknotes that had not gone through the formal banking system implying
that they may have been transported across the border by land. According to Time,
Hezbollah has pledged to rebuild apartment buildings and entire villages within three
years and has sent civil-affairs teams wearing hats that read Jihad For
Reconstruction.26 Lebanon’s Prime Minister Fouad Siniora is reportedly offering a
government compensation package of $33,000 for Lebanese whose homes were
destroyed in the fighting between Hezbollah and Israel. At this time, it is unclear
whether the Lebanese government will be able to follow through on such a
commitment. Overall, the Lebanese government estimates that damage to the
country’s infrastructure from the war is approximately $3.5 billion to $4 billion.
To counter Hezbollah’s efforts, President Bush announced on August 21, 2006
that the United States would provide $230 million to Lebanon (an additional $175
million on top of an earlier pledge of $55 million). According to the U.S. State
Department, the President’s initial $55 million pledge came from various re-
programmed FY2006 foreign aid funds, including $24 million from the International
Famine and Disaster Assistance account, $21 million from the Emergency Refugee
and Migration Account (ERMA), $10 million from the P.L.480 fund (food aid), and
$420,000 from the Non-proliferation, Anti-terrorism, De-mining, and Related
Programs account (NADR). At this time, it is unclear where the second tranche of
$175 million will come from.
According to Director of U.S. Foreign Assistance Ambassador Randall Tobias,
U.S. aid to Lebanon will be focused on the following projects:

25 David R. Sands, “Hezbollah takes lead in rebuilding,” The New York Times, August 17,

2006; and Daniel Steinvorth, “The Footrace to Rebuild Lebanon,” The New York Times,

September 4, 2006.
26 “The War for Hearts and Minds, Time, August 27, 2006.

!Reconstructing the Fidar Bridge in Jbeil, a key link in Lebanon’s
coastal highway between Beirut and the northern city of Tripoli;
!Removing debris from the southern road between Marjeyoun and
!Procuring materials and hiring local workers to repair damaged
!Cleaning and repairing schools in preparation for the coming school
!Providing new nets, hooks and other trade material to fishermen
whose equipment was damaged; and
!Supporting local fishermen working to clean up the oil slick that
now pollutes 90 miles of the Lebanese coastline.27
The international community also has recognized Lebanon’s urgent need for
reconstruction assistance, and on August 31, 2006, donors convened in Stockholm,
Sweden for a conference to raise reconstruction funds for Lebanon. A total of $940
million in early reconstruction aid was committed and earmarked for rebuilding.
Some observers contend that countries opposed to Iranian influence in Lebanon have
already fallen behind due to the slow pace of international financial and security
commitments and the lack of adequate personnel on the ground to dispense aid.

27 David Shelby, “United States Extends Loan Guarantees to Israel,” Washington File,
August 31, 2006.

Table 2. International Contributions to Rebuilding Lebanon
CountryPledge (Grants only)
Saudi Arabia$500 million (also provided $1 billion in loans to
Lebanon’s Central Bank)
Kuwait$300 million (also provided $500 million in loans to
Lebanon’s Central Bank)
Qatar$300 million
United States$230 million
European Union$117 million
International Monetary Fund (IMF)$112 million
United Arab Emirates$50 million
United Kingdom$40 million
Italy $38 million
Spain$34 million
Germany $28 million
France$25 million
Canada$22 million
Switzerland$20 million
Sweden $20 million
Australia$10.5 million
Turkey$10 million
Japan$1.9 million
Totals $ 1.8584 billion (est.)
Sources: Estimates based on various media reports and U.S. State Department figures.
The War’s Impact on Lebanese Internal Politics
For almost 30 years prior to 2005, Lebanon’s internal politics were dominated by
Syria, which maintained a large military presence in Lebanon ostensibly as part of an
Arab League peacekeeping force. Though supported by some Lebanese, including
much of the Shiite Muslim community, the Syrian presence was increasingly resented
by other elements of the Lebanese population including Maronite Christians, Sunni
Muslims, and Druze (followers of a small sect derived from Islam). The assassination
in February 2005 of former Lebanese Prime Minister Rafiq Hariri, widely blamed on
Syrian agents because of Hariri’s opposition to Syrian policies, led to a dramatic chain
of events that profoundly altered the Lebanese political scene. Under heavy domestic
and international pressure, Syria withdrew its forces from Lebanon in April 2005;
relatively free parliamentary elections were held in May and June without direct Syrian
interference in the balloting process; a cabinet headed by a member of the anti-Syrian
bloc was installed; and the U.N. Security Council passed Resolution 1595, which
established an independent commission to investigate the circumstances of Hariri’s

murder. Initial reports of the commission seemed to implicate Syria or pro-Syrian
Lebanese but findings remain inconclusive so far.
At the time, many observers interpreted Syria’s unexpectedly rapid withdrawal
and the subsequent election of an anti-Syrian majority in the Lebanese parliament as
a major setback for Syria’s ambitions in the region, and some even predicted that the
regime of Syrian President Bashar al-Asad had been seriously weakened. However,
Syria maintained significant assets in Lebanon: a mixed government in Lebanon
comprising both pro- and anti-Syrian elements (see below); a possible residual
presence of Syrian intelligence assets in Lebanon;28 and Hezbollah, which has refused
so far to relinquish its arms and apparently continued to support Syria’s agenda by
periodically attacking Israeli military positions near the Israeli-Syrian border.
The Lebanese government itself is far from monolithic. On one hand,
parliamentary elections gave a majority (72 out of 128 seats) to a large anti-Syrian
bloc headed by the late Prime Minister’s son; on the other hand, the Lebanese Shiite
Hezbollah leads a 33-seat minority bloc, and a third 21-seat bloc headed by an
independent former army officer is cooperating with the Hezbollah bloc on some
issues. President Emile Lahoud was elected with strong support from Syria and
currently enjoys the support of Hezbollah as well; he refuses to retire before his term
ends in 2007. Prime Minister Fouad Siniora, though a member of the anti-Syrian
bloc, nonetheless heads a mixed cabinet which, for the first time in Lebanese history,
contains two members of Hezbollah. Disputes over disarmament of Hezbollah, the
status of President Lahoud, and relations with Syria have already created several
cabinet crises and severely limited the ability of the government to deal with
domestic and regional issues.
The 34-day military confrontation between Hezbollah and the Israeli Defense
Force in July and August 2006 greatly enhanced the prestige of Hezbollah at the
expense of the Lebanese government. Hezbollah’s leader Sheikh Hassan Nasrallah
acquired a folk-hero status as his organization was widely hailed both for its military
prowess in the conflict with Israel and for its perceived ability to initiate disaster
relief projects far more quickly and efficiently than the regular governmental
organizations. Even those Lebanese who might be inclined to criticize Hezbollah for
precipitating a crisis that devastated much of southern Lebanon have been muted, at
least temporarily, by Nasrallah’s soaring popularity and Hezbollah’s success in
delivering aid to large numbers of displaced persons and other homeless or destitute

28 In an interview with Lally Weymouth published in the May 1, 2006 edition of Newsweek,
Prime Minister Siniora “Syria has its men and people in the country: supporters, some
politicians and quite a number of Syrian intelligence.” According to the U.N. Secretary-
General, a U.N. team attempting to verify the withdrawal of all foreign armies from Lebanon
under Security Council Resolution 1559 noted that the government of Lebanon “is confident
that, by and large, Syrian intelligence has withdrawn,” but allegations of “ongoing Syrian
intelligence activity in Lebanon have continued to surface on occasion.” United Nations
Security Council, Document S/2006/248, Letter dated 18 April 2006 from the Secretary-
General addressed to the President of the Security Council, Paragraph 19.

Lebanese.29 Similarly, he finds himself in a strong position to withstand pressures
to disarm Hezbollah. Syria too, as a major sponsor of Hezbollah, finds that it has
more maneuver room in dealing with Lebanese issues. Notably, the earlier
enthusiasm among some Lebanese to pursue investigations designed to uncover a
possible Syrian role in the Hariri assassination has dissipated, to a considerable
The inevitable comparisons being drawn between Hezbollah effectiveness and
Lebanese government ineptitude raise questions about the future of the Siniora
government and its ability to withstand domestic criticism over its leadership during
the current crisis. To some extent, the answers to these questions depend on the
interaction of Lebanon’s diverse religious sectarian and political groups. Lebanon
is the most religiously diverse country in the Middle East and its political system is
based on a careful distribution of governmental posts by religious sect. Shiite
Muslims constitute a plurality, though not a majority, of the population, and in recent
years they have increased their influence in the Lebanese body politic as their
numbers have continued to grow. While not all Lebanese Shiites support Hezbollah,
many observers believe Sheikh Nasrallah is likely to be heeded to a greater degree
in the post conflict environment in Lebanon; he benefits from his ability to play
multiple roles including military leader, reconstruction czar, and political participant.
Despite his currently favorable image, however, Nasrallah may prefer to enhance his
role in the present government including participation by Hezbollah (albeit at a junior
level) in the cabinet and leadership of a strong parliamentary bloc rather than to
mount an uncertain challenge that could galvanize currently dormant opposition to
the Shiite leadership in Lebanon.
In the meantime, the interaction of government offices and agencies in Lebanon
remains somewhat awkward, complicating the national decision-making process. For
example, Prime Minister Siniora, who maintains a dialogue with the United States
and the international community, has not had direct dealings with Hezbollah, which
the United States lists as a foreign terrorist organization, since the war began. Rather,
Siniora and Nasrallah have communicated through the speaker of parliament, Nabih
Berri, who is aligned with the Hezbollah-led bloc, but is a member of the more
moderate Shiite faction known as Amal.30 At the same time, Siniora has gained some
stature by negotiating some of the wording to Lebanon’s advantage in the final
version of Resolution 1701. Realignments within the three somewhat amorphous
blocs in parliament are also possible, if not likely, as the political situation continues
to evolve in the aftermath of the July-August fighting.

29 Sharon Behn, ‘U.S., Hezbollah vie to rebuild for Lebanese; Hope to win public opinion,”
The Washington Times, August 18, 2006; Paul Richter, “Cease-Fire in the Middle East,” Los
Angeles Times, August 17, 2006.
30 Edward Cody, “Italian Troops Land in Southern Lebanon,” The Washington Post,
September 3, 2006, p. A15.

Issues for U.S. Policy and Congress
U.S. Foreign Assistance to the Middle East31
As a result of the Israeli-Lebanon/Hezbollah conflict, the United States has
pledged $230 million in humanitarian and reconstruction assistance to Lebanon.
While some parts of Israel were also affected by the war, no additional assistance has
been announced with the exception of an extension of existing loan guarantees.32
The United States has longstanding aid programs to countries in the Middle East,33
including both Israel and Lebanon. Foreign assistance has been used to promote the
peace process, spur economic development, and in the case of Israel, to strengthen
its defense capabilities through military assistance.
Israel’s Loan Guarantees. Loan guarantees are a form of indirect U.S.
assistance to Israel, since they enable Israel to borrow from commercial sources at
lower rates and not from the United States government. Congress directs that
appropriated or other funds be set aside in a U.S. Treasury account for possible
default. These funds, which are a percentage of the total loan (based in part on the
credit rating of the borrowing country), come from the U.S. or the Israeli government.
Israel has never defaulted on a U.S.-backed loan guarantee, as it needs to maintain
its good credit rating in order to secure financing to offset annual budget deficits.
P.L. 108-11, the FY2003 Emergency Wartime Supplemental Appropriations
Act, authorized $9 billion in loan guarantees over three years for Israel. P.L. 108-11
stated that the proceeds from the loan guarantees could be used only within Israel’s
pre-June 1967 borders, that the annual loan guarantees could be reduced by an
amount equal to the amount Israel spends on settlements in the occupied territories,
that Israel would pay all fees and subsidies, and that the President would consider
Israel’s economic reforms when determining terms and conditions for the loan
guarantees. On November 26, 2003, the Department of State announced that the $3
billion loan guarantees for FY2003 were reduced by $289.5 million because Israel
continued to build settlements in the occupied territories and continued construction
of the security barrier separating the Israelis and Palestinians.
The Bush Administration reportedly plans to submit a request to Congress to
extend the authorization of Israel’s loan guarantees through FY201034. To date, Israel
has $4.6 billion in U.S.-backed commercial credit left to draw on.

31 Prepared by Connie Veillette, Analyst in Foreign Policy.
32 Herb Keinon, “U.S. to Israel: No Financial Aid for War,” The Jerusalem Post, August 22,
2006, and “Finance Minister: U.S. Loan Guarantee Extension Shows ‘Faith’ in Israeli
Economy,” Tel Aviv Ynetnews, August 20, 2006.
33 For more information, see CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy
M. Sharp. And RL32260, U.S. Foreign Assistance to the Middle East: Historical
Background, Recent Trends, and the FY2007 Request, by Jeremy M. Sharp.
34 “United States Extends Loan Guarantees to Israel,” Jerusalem Post, August 22, 2006.

Lebanon.35 The United States provides modest amounts of assistance to
Lebanon, including economic (ESF) and military assistance (FMF),36 and
humanitarian de-mining funds (NADR). Annual funding for Lebanon has been
maintained at roughly $35 to $40 million since FY2001 with the objectives of
promoting economic growth, strengthening democracy and good governance, and
protecting the environment.
In addition, Lebanon may be eligible for $10 million in Department of Defense
funds under Section 1206 of the FY2006 National Defense Authorization Act (PL
109-163), which authorizes funds for the training and equipping of foreign military
forces conducting counter-terrorist operations. Reportedly, this aid would help
modernize the Lebanese Armed forces (LAF) by providing funds for the procurement
of spare parts to upgrade and repair the LAFs 5-ton military trucks, M113 armored
personnel carriers, and UH-1H utility helicopters. The Pentagon may attach
conditions to the $10 million aid package if appropriated, requiring the LAF to use
the equipment provided to contain Hezbollah’s militia.37
As stated earlier, the United States has pledged $230 million in aid to Lebanon
for reconstruction. Of the total U.S. pledge, $55 million has been committed and re-
programmed from various FY2006 foreign operations accounts. The makeup of the
remaining $175 million pledge had not been announced as of September 2006, but
it is expected that the Administration will send a request to Congress to reprogram
existing FY2006 funds for at least part of the total.
On September 14, 2006, the Washington Post reported that Representative Tom
Lantos, ranking Minority Member of the House International Relations Committee,
put a hold on any assistance to Lebanon until the Lebanese Armed Forces and
international peacekeepers deploy along the Lebanese-Syrian border. At this point,
it is unclear how long the delivery of aid will be suspended.
Humanitarian Issues38
During the war, partisans on both sides of the conflict and some independent
human rights activists alleged that the warring parties were targeting each other’s
civilian populations by employing inaccurate munitions that are designed to saturate
wide areas with shrapnel or explosive sub-munitions.
Condemning Hezbollah. Observers have condemned Hezbollah’s
indiscriminate firing of rockets into northern Israeli towns and cities in order to

35 See also CRS Report RL33509, Lebanon, by Alfred B. Prados.
36 FMF to Lebanon has moderately increased since the withdrawal of Syrian troops from
Lebanon. U.S. officials would like to improve the capabilities of Lebanon’s Internal Security
Forces and the Lebanese Armed Forces which protect the country from external threats. See,
“U.S. Pledges More Aid to Lebanon in ‘07,”, July 10, 2006.
37 “Pentagon Aid Package For Lebanon Designed To Counter Hezbollah,”Inside the
Pentagon, August 31, 2006.
38 Prepared by Christopher M. Blanchard, Middle East Policy Analyst.

terrorize the population and cause extensive damage to infrastructure. According to
the Jerusalem Post, many of the rockets fired contained anti-personnel munitions
such as steel ball bearings.39 Israeli civil defense agencies continue to identify,
disarm, and remove unexploded ordnance (UXO) fired by Hezbollah into northern
Israel during the conflict.
On September 14, 2006, Amnesty International accused Hezbollah militants of
war crimes and “serious violations of international humanitarian law” during the
Lebanon war. In a report that attempted to balance earlier accusations against Israel’s
bombing of civilian areas in Lebanon, Amnesty noted that Hezbollah’s Katyusha
rockets “cannot be aimed with accuracy, especially at long distances, and are
therefore indiscriminate.”40
Israel’s Use of Cluster Weapons. Observers have decried Israel’s use of
cluster weapons to counter Hezbollah’s rockets attacks. Since the United States is a
major provider of military aid to Israel, the cluster weapons issue received media
attention during and since the war and has reportedly become the subject of an
Administration investigation.
Field and press reports suggest that large numbers of cluster weapon sub-
munitions (commonly referred to as “cluster bombs”) remain scattered across areas
of southern Lebanon in the aftermath of fighting between Hezbollah and the Israel
Defense Forces (IDF). The sub-munitions in southern Lebanon are the unexploded
remnants of a range of Israeli ground- and air-launched cluster weapons, including
bombs, artillery shells, and rockets. The United States apparently supplied some of
the cluster weapons that Israel used in the conflict.41 Officials from the United
Nations, non-governmental organizations, and foreign governments have criticized
Israel for its use of cluster weapons in populated areas because of the known high
rate of failure for the cluster weapons’ sub-munitions and the potential for these so-
called “bomblets” to kill and injure civilians. Israel reportedly fired many of the42
cluster weapons in question during the final days of the conflict. As of September
7, the United Nations had catalogued 12 deaths and 61 reported injuries from UXO
in Lebanon, all but five of which were linked to cluster sub-munitions. Up to 448

39 “Expert Views Effect, Breakdown of Hizballah Rocket Attacks on Northern Israel,”
Jerusalem Post, September 6, 2006.
40 “Amnesty International Says Hezbollah Committed War Crimes,” New York Times,
September 14, 2006.
41 David S. Cloud, “Inquiry Opened Into Israeli Use Of U.S. Bombs,” New York Times
August 25, 2006. An August 26, 2006, presentation by United Nations Mine Action
Coordination Center (UNMAS) South Lebanon office catalogued the following numbers of
U.S.-manufactured cluster weapon sub-munitions during surveys in southern Lebanon
(source weapons in parentheses): 715 M-42’s (105-millimeter artillery shells), 820 M-77’s
(M-26 rockets), and 5 BLU-63’s (CBU-26 cluster bombs). The UNMAS teams also
reported 631 M-85 Israeli-produced sub-munitions had been found. See, UNMAS South
Lebanon, “Cluster Bomb Situation - South Lebanon July/August 2006,” August 26, 2006.
Available at []
42 Agence France Presse, “Israel Spewed Cluster Bombs over Lebanon in Last Days of War:
UN,” August 30, 2006.

cluster weapon strike sites from the recent conflict have been identified, and U.N.
experts estimated that 12 to 15 months will be needed to clear the sites of cluster sub-
munitions.43 According to Human Rights Watch, 57 countries maintain stockpiles
of cluster weapons, and nine countries have used them in combat, including the
United States in Iraq and Afghanistan.44
Israeli Reaction. Israeli officials maintain that the IDF carefully considered
the potential for civilian casualties both during and following their military
operations, and that IDF use of cluster weapons, as well as the IDF’s broader
methods during the southern Lebanon campaign, “are legal under international law45
and their use conforms with international standards.” Israel has identified
Hezbollah’s use of civilian homes for rocket launching and munitions storage as the
primary explanation for IDF targeting of some populated areas during the conflict.
IDF sources reported during the conflict that the predominant targets for their cluster
weapons were Hezbollah-manned Katyusha rocket launch sites in open areas.
Following the conclusion of the cease-fire agreement, the IDF transferred maps to
UNIFIL forces showing likely locations for UXO and distributed warning notices to
residents in conflict zones advising them to delay their return to their villages and46
homes until UXO had been cleared.
Administration Response. The U.S. Department of State’s Office of
Weapons Removal and Abatement has announced plans to expand an ongoing
landmine and unexploded ordnance (UXO) humanitarian clearance program in
Lebanon in the aftermath of the Israel-Hezbollah conflict. The expansion of the
program will consist of an emergency grant of $420,000 in reprogrammed FY2006
funds to a non-governmental UXO removal organization and greater support for the
United Nations Joint Logistics Center UXO data collection and mapping operations

43 UNMAS, “Lebanon Unexploded Ordnance Fact Sheet, September 7, 2006.” Response to
CRS Inquiry.
44 See Human Rights Watch, “Memorandum to Delegates to the Convention on
Conventional Weapons Group of Governmental Experts On Explosive Remnants of War,”
March 2003; and, Paul Wiseman, “Cluster Bombs Kill in Iraq, Even After Shooting Ends,”
USA Today, December 11, 2003. According to the U.S. Defense Department, the U.S.
military used air and ground launched cluster weapons during Operation Enduring Freedom
in Afghanistan and Operation Iraqi Freedom, including in urban combat during the fall of
Baghdad. Civilian casualties have been reported from unexploded U.S. cluster weapon sub-
munitions in both countries.
45 Agence France Presse, “Israel Says Arms Used in Lebanon Keep by International Law,”
August 31, 2006. No treaty or international convention specifically governs the deployment
or use of cluster munitions in war. However, unexploded ordnance (UXO) removal
specialists and advocates for moratoria and bans on the use of cluster munitions argue that
the articles of the Geneva Conventions relating to the differentiation and protection of
civilian populations prohibit the use of cluster munitions in civilian areas. For example, this
view is advanced by the Cluster Munition Coalition, an anti-cluster weapon network that
advocates on behalf of sub-munition victims and campaigns to ban use of the weapons.
46 See Israel Ministry of Foreign Affairs, “Behind the Headlines: Legal and operational
aspects of the use of cluster bombs,” September 5, 2006; and, Meron Rapoport, “IDF: No
Prohibition on Cluster Bombs,” Ha’aretz (Tel Aviv), September 8, 2006.

in Lebanon.47 The Department of State also is seeking congressional approval for the
allocation of up to $2 million to continue UXO clearing activity in Lebanon during
Munitions Shipment Hold and Investigation. According to press reports
citing unnamed Administration officials, the Department of State has held up a
shipment of M-26 cluster munitions to Israel and initiated an investigation of the
Israel Defense Force’s use of cluster munitions during the recent fighting. In early
August, Israel reportedly requested that a pre-ordered shipment of U.S. M-26 rockets
be expedited for IDF use in Multiple Launch Rocket System (MLRS) counterfire
strikes against Hezbollah rocket launch sites in southern Lebanon. Initial reports
suggested the shipment was delayed out of concern over the weapons’ potential use,49
and subsequent press reports suggest the shipment has been placed on hold. In
addition to this reported hold, the Department of State’s Directorate of Defense Trade
Controls also reportedly is conducting an investigation focused on whether Israel
violated confidential agreements with the United States that restrict Israel’s use of50
U.S.-supplied cluster munitions to certain military targets in non-civilian areas.
Administration officials have declined to comment specifically on these reports.
President Bush repeatedly characterized Israel’s military actions as “self-defense”
during the conflict. The Arms Export Control Act requires that U.S.-supplied
weapons can be used only in “legitimate self-defense.”
Congressional Responses. In Congress, Senators Feinstein and Leahy
introduced an amendment to the FY2007 Department of Defense Appropriations bill
(S.Amdt.4882 to H.R. 5631) that would have prevented FY2007 funds from being
spent “to acquire, utilize, sell, or transfer any cluster munition unless the rules of
engagement applicable to the cluster munition ensure that the cluster munition will
not be used in or near any concentrated population of civilians, whether permanent
or temporary, including inhabited parts of cities or villages, camps or columns of
refugees or evacuees, or camps or groups of nomads.”51 The amendment failed to
pass during Senate floor consideration on September 6, 2006 by a vote of 30 to 70
(Vote No. 232). Some opponents of the amendment argued that its language would

47 The United Nations Joint Logistics Center (UNJLC) works in partnership with the
Vietnam Veterans of America Foundation. For more information, see UNJLC, “Mine-UXO
in Lebanon,” August 2006. Available at [
48 The grants will support the activities of the Mines Advisory Group (MAG). U.S.
Department of State - Office of the Spokesman, Fact sheet: “United States Emergency Aid
to Lebanon to Clear Explosive Remnants of War,” August 23, 2006. Available at
[ ht t p: / / at r / pa/ pr s / ps/ 2006/ m] .
49 David S. Cloud, “Israel Asks U.S. to Ship Rockets With Wide Blast,” New York Times,
August 11, 2006.
50 David S. Cloud, “Inquiry Opened Into Israeli Use Of U.S. Bombs,” New York Times
August 25, 2006.
51 S.Amdt.4882 to H.R. 5631; and Office of Senator Dianne Feinstein, Press Release:
“Senators Feinstein and Leahy Call for New Policy on Use of Cluster Bombs,” September

5, 2006.

unduly restrict the options available to U.S. military commanders in battle. Others
called for hearings to further discuss the subject.52
U.S. Efforts and Other Efforts to Combat Hezbollah
U.S. Terrorism Designations and Related Effects. In December 2004,
the U.S. State Department added Al-Manar to the Terrorist Exclusion List (TEL).
Applicable criteria for adding Al-Manar to the TEL included inciting to commit a
terrorist act and providing material support to further terrorist activity. The effects of
an entity being placed on the TEL could include the possible deportation and
exclusion from the United States of individuals found belonging to or supporting the
TEL designated organization. Concurrent with the State Department’s placement of
Al-Manar on the TEL, the organization was no longer allowed a satellite feed into the
United States. Though Al-Manar is banned from broadcasting its satellite signal into
the United States, the station does upload its television programs and other like
material on its website, which is accessible to any individual with an internet
On March 23, 2006, the Department of the Treasury designated Al-Manar as a
Specially Designated Global Terrorist (SDGT) entity. In making this designation,
Stuart Levey, Treasury Under Secretary for Terrorism and Financial Intelligence,
stated, “Any entity maintained by a terrorist group — whether masquerading as a
charity, a business, or a media outlet — is as culpable as the terrorist group itself.”54
The effects of an entity being designated as a SDGT include the blocking of access
to all assets under U.S. jurisdiction by the organization, its parent companies, and
individuals who have materially supported the entity’s terrorist activities. Future
transactions between U.S. persons or corporations and Al-Manar are also prohibited
consistent with the provisions of the SDGT.
Recent Al-Manar Related Activity in the United States. In December
2002, Salim Boughader, an owner of a Lebanese restaurant in Mexico, was arrested
by Mexican authorities on human-smuggling charges, as he is suspected of
trafficking up to 200 Lebanese nationals into the United States. During post arrest
questioning, Mr. Boughader reportedly admitted to knowingly providing assistance
to an employee of Al-Manar in gaining unlawful entrance into the United States. Mr.
Boughader also stated that he assisted individuals with ties to Hezbollah, as he and
other Lebanese people “did not see Hezbollah as terrorists.”55

52 See Congressional Record, Senate, September 6, 2006, Department of Defense
Appropriations Act, 2007 pp. S8992-S8996.
53 Lebanese Communications Group - Al-Manar TV
Available online at [].
54 U.S. Designates Al-Manar as a Specially Designated Global Terrorist Entity Television
Station is Arm of Hizballah Terrorist Network, 23 March, 2006, The Department of
Treasury website [].
55 “Terror Linked Migrants Channeled Into U.S.,” Fox News, July 03, 2005,
[ h t t p : / / www.f s t o r y/ 0,2933,161473, ml ] .

On August 23, 2006, Javed Iqbal was arrested on charges of offering live
broadcasts of Al-Manar programming to potential customers in New York. Through
selling equipment from his home and his Brooklyn-based company, HDTV Ltd., Mr.
Iqbal is suspected of offering customers access to the Al-Manar signal. It is reported
that in the instances Mr. Iqbal installed the necessary equipment and attempted to
retrieve the Al-Manar transmission, he ultimately was not successful in obtaining the
desired signal.56
U.S. and Israeli Action Against Hezbollah Finances.57 On August 29,
2006, the U.S. Department of the Treasury designated the Islamic Resistance Support
Organization (IRSO) of Lebanon as a Specially Designated Global Terrorist entity
for serving as “a key Hezbollah fund-raising organization.”58 According to Treasury
officials, the organization openly raised funds for Hezbollah via direct solicitation
and advertisements on Hezbollah’s Al Manar television network. The IRSO
reportedly allowed its donors to specify whether or not they wished their funds to be
used for military equipment or weapons purchases, in addition to a range of other
services. As a result of the designation, the IRSO is prohibited from operating in the
United States, and any of its assets under U.S. jurisdiction were frozen.
The action against IRSO has been followed by two actions against Lebanese and
Iranian financial entities suspected of providing support to Hezbollah. On September

7, 2006, Treasury’s Under Secretary for Terrorism and Financial Intelligence (TFI)

Stuart Levey announced the designation of Bayt al-Mal and the Yousser Company
for Finance and Investment of Lebanon for serving “as Hezbollah’s unofficial
treasury, holding and investing its assets and serving as intermediaries between the
terrorist group and mainstream banks.” Bayt al-Mal director Husayn al-Shami also59
was designated. On September 8, 2006, Treasury officials announced that Iran’s
Bank Saderat would be prohibited from conducting direct or indirect financial
transactions with the U.S. financial system, in part because the Government of Iran
has used the bank to fund Hezbollah and other terrorist organizations.60 Prior to the
U.S. legal action, Israel reportedly conducted a series of military strikes during July
2006 on Hezbollah financial centers and banks in Lebanon alleged to conduct
business for Hezbollah operatives. Brigadier General Dani Arditi, advisor to the
Israeli Prime Minister for Counterterrorism, confirmed that the strikes were meant

56 Walter Pincus, “New Yorker Arrested for Providing Hezbollah TV Channel,” The
Washington Post, August 25, 2006.
57 Prepared by Christopher M. Blanchard, Middle East Policy Analyst.
58 U.S. Department of the Treasury, “HP-73: Treasury Designates Key Hizballah
Fundraising Organization,” August 29, 2006.
59 U.S. Department of the Treasury, “HP-83:Treasury Designation Targets Hizballah’s
Bank,” September 7, 2006.
60 U.S. Department of the Treasury, “HP-87: Treasury Cuts Iran’s Bank Saderat Off From
U.S. Financial System,” September 8, 2006.

to serve as a message “for all the Lebanese banks.... Assistance to Hezbollah is direct
assistance to terrorist organizations.”61
Al-Manar: Hezbollah’s Satellite Television Station.62 Al-Manar, a
satellite television station controlled by Hezbollah, broadcasts into most areas of the
world. Al-Manar refers to itself as the “station of resistance” and has a stated mission63
of conducting “psychological warfare against the Zionist enemy.” The station, with
a reported budget of $20 million,64started transmitting limited programming in June


On two occasions during the recent conflict, Israel bombed the main Al-Manar
facility located in southern Beirut. Though buildings on the complex caught fire,
transmission satellite antennas were destroyed, and the station’s signal went through
brief periods of intermittent transmission, the network returned to broadcasting at full65
capacity shortly after these attacks. Al-Manar’s public relations chief Ibrahim
Farhat stated that the organization developed contingency plans to allow for
broadcasting from remote locations after the U.S. designated it a terrorist
organization in December 2004.66
Islam, Al Qaeda, and the Global War on Terrorism67
The conflict in Lebanon challenged many Sunni Islamists, including jihadist Al
Qaeda leaders such as Ayman Al Zawahiri, to reconcile their documented animosity
toward Shiite Muslims with their desire to appear to be in solidarity with anti-Israeli
and anti-American sentiment and activity that emerged around the Islamic world in
response to the crisis. During the fighting, debate over the legitimacy of providing
support for Hezbollah, a Shiite Lebanese militia, was particularly pointed on many
extremist Internet fora and in a series of public statements issued by conservative
Sunni Islamic leaders. Some condemned Hezbollah’s actions as part of a Shiite
conspiracy to gain regional power or a leadership bid by Hezbollah leader Hassan
Nasrallah, while others argued that Sunni and Shiite Muslims should have united to68
confront Israel and its supporters. To the extent that these debates may have
inspired unity or division within and across religious and political communities in the

61 Adam Ciralsky and Lisa Myers, “Hezbollah Banks Under Attack in Lebanon” MSNBC
News, July 25, 2006.
62 This section was prepared by John Rollins, Specialist in Terrorism and International
63 Al-Manar TV on the web at [].
64 “Hizbullah’s Al Manar TV Budget More than Israel's PR Outlay,” Arutz Sheeva, 28
August, 2006.
65 “Hizbollah Rockets Hit Haifa”, Reuters UK, July 16, 2006.
66 “Hezbollah’s al-Manar TV survived attacks”, Examiner, August 25, 2006.
67 This section was prepared by Christopher Blanchard, Middle East Policy Analyst.
68 For discussions of these competing views, see Bernard Haykel, “The Enemy of My Enemy
Is Still My Enemy,” New York Times, July 26, 2006; and, Annia Ciezadlo, “Sheikh Up,”
New Republic, August 7, 2006.

Arab world and beyond, they may have important implications for the success of U.S.
foreign policy initiatives in the region, and for U.S. counterterrorism policy
objectives in particular.
The airing of diverse perspectives toward the crisis across the Arab and wider
Islamic worlds brought the competing religious and political priorities of some
important figures and groups into contrast and conflict. Conservative Sunni Islamic
leaders, such as Qatar-based cleric and international Muslim Brotherhood figure
Yusuf Al Qaradawi argued that Muslims should support the activities of Hezbollah
and Hamas as legitimate “resistance” activities, based on Quranic injunctions to
defend Muslim territory invaded by outsiders.69 Similarly, Egypt’s Grand Mufti Ali
Gomaa stated that Hezbollah was “defending its country” and its actions were “not
terrorism.”70 Saudi sheikh Salman Al Awda called for Sunnis to set aside their
“fundamental and deep disagreement” with Hezbollah and Shiites in order to
confront “the criminal Jews and Zionists.”71 While many of the strongest statements
that were issued appeared to primarily serve rhetorical purposes, they may have
continuing political implications: many religious figures sought to distance
themselves from the more nuanced positions of Arab political leaders during the
crisis, some of whom have otherwise been characterized as detached from public
opinion and vulnerable to revolt. Moreover, groups or individuals may utilize
religious figures’ judgments and statements to justify future attacks on the interests
or personnel of Israel, the United States, or their own governments should the crisis
flare up again.
Disagreements also emerged among violent Sunni Islamist extremists, including
Al Qaeda and its affiliates. In a July 31 Internet posting, an Al Qaeda in the Arabian
Peninsula representative seemingly rejected any unitarian sentiment between violent
Sunni groups and Hezbollah by characterizing Hezbollah as “the head of the Iranian
spear in the Arab region,” and arguing that “any support to Hezbollah in Lebanon is
indirect support for the Iranian objectives.”72 The view of Al Qaeda leadership
figures, as expressed by Ayman Al Zawahiri first in a video released on July 27, and
again on September 11, remains somewhat ambiguous with regard to sectarian issues.
On July 27, Al Zawahiri stated that “our nation will get together to fight [Israel and
its allies],” but he refrained from directly urging Sunni-Shiite unity or advocating
direct Sunni support for Hezbollah.73 A Hezbollah official interviewed on Al Jazeera
television following the release of Al Zawahiri’s July tape stated that Al Zawahiri’s

69 “Islamic Cleric Al-Qaradawi Supports Hizballah, HAMAS,” Al-Jazirah Television
(Doha), OSC Document GMP20060730638004, July 30, 2006.
70 Reuters, “Egypt’s Mufti Defends Hizbollah Operations,” July 28, 2006.
71 Sheikh Abdallah Bin-Jibrin, “Is It Permissible to Support the So-Called Rafidi [Shiite]
Hizballah?” Nur al-Islam (website), OSC Document GMP20060721827005, July 19, 2006;
and, Abdallah al-Rashid, “Al-Awdah: We Disagree with Hizballah, But We Reject Israel’s
Aggression,” Islam Today (Riyadh), OSC Document GMP20060724837002, July 24, 2006.
72 “Al-Qa’ida in Saudi Arabia Urges Countering Hizballah,” OSC Document -
FEA20060802025964 August 2, 2006.
73 “Al-Zawahiri Comments on Lebanon, Gaza” OSC Document - FEA20060727025705,
July 27, 2006.

statement should have been “clearer in its reference to the ideological and political
dimensions of unity among Muslims, and that, in the future, “there should be clear
and direct references to Hizballah and Shiites in a positive sense.”74 In September,
Zawahiri addressed his advice and urgings to “Muslims” around the world and in
Lebanon rather than addressing the sectarian questions raised by Hezbollah and
others. He specifically called on “the Muslim nation” to aid “its Muslim brothers in
Lebanon and Gaza,” and urged Lebanese Muslims “to reject international resolutions,
particularly the recent Security Council Resolution 1701.”75 Any resolution of the
ongoing Sunni jihadist debate regarding the appropriate stance toward Shiites will
likely have broader implications for any potential intervention in future conflict
involving Shiites by Sunni jihadist cells and others who look to Al Qaeda leaders for
There are many divergent interpretations of the July-August war in Lebanon and
its implications for U.S. policy in the Middle East. On the one hand, some consider
this conflict to be just the latest battle in a global war on terror pitting the
democracies of the West and Israel against terrorist organizations backed by radical
regimes. Others view the war less in terms of an overall effort against Islamic
extremism and more of a battle between powerful nation-states, seeing Lebanon as
the battleground in an “opening round” of an Iranian-Israeli struggle for regional
preeminence. Still, some observers assert that the war is simply another chapter in a
long history of localized Arab-Israeli violence spurred by the lack of any discernable
progress in a peace process. In reality, there may be elements of truth within all of
these perspectives.
The conflict has posed its own set of challenges for U.S. policy toward
Lebanon. In a broader sense, the war has jeopardized not only the long-term stability
of Lebanon but has presented the Bush Administration with a basic dilemma. On one
hand, the Administration is sympathetic to Israeli military action against a terrorist
organization; President Bush has spoken in favor of Israel’s right of self-defense. On
the other hand, the fighting dealt a setback to Administration efforts to support the
rebuilding of democratic institutions in Lebanon. One commentator suggested “the
two major agendas of his [Bush’s] presidency — anti-terrorism and the promotion
of democracy — are in danger of colliding with each other in Lebanon.”76
If Lebanon disintegrates through a return to communal civil strife or becomes
closely aligned with Syria or Iran, U.S. goals could be seriously affected. The United
States would lose a promising example of a modernizing pluralist state moving

74 Interview with Hezbollah Political Council member, Hasan Hudruj, “Al-Jazirah TV:
Hizballah Official Comments on Al-Zawahiri’s New Videotape,” Al-Jazirah Television
(Doha), OSC Document - GMP20060727648002, July 27, 2006.
75 “Jihadist Website Posts Al-Zawahiri 9/11 Anniversary Video,” OSC Document -
FEA20060912027565, September 11, 2006.
76 Michael Hirsh, “The Legacy On the Line,” Newsweek, July 24, 2006, p. 30.

toward a resumption of democratic life and economic reform and quite possibly face
a return to the chaos that prevailed in Lebanon during the 15-year civil war. Such
conditions would be likely to foster terrorism, unrest on Israel’s border, and other
forms of regional instability. Moreover, the growth of Syrian or Iranian influence or
some combination of the two could strengthen regional voices supporting extremist
and likely anti-Western views associated with clerical regimes (Iran), totalitarian
models (Syria), or a militant stance toward Israel. A viable cease-fire, on the other
hand, could be an initial step toward further progress in the long quest for regional
With Hezbollah deeply ingrained in Lebanese Shiite society, the movement has
become a fixture in the political system, though whether or not its militia and terrorist
wings can be disarmed remains to be seen. Many Israelis remain deeply skeptical
over international efforts to disarm Hezbollah, as the real work of preventing re-
armament over land, sea, and air will take place behind the scenes in the months
ahead. Israeli sources are already reporting the renewal of Syrian and Iranian
shipments to Hezbollah though such reports are difficult to confirm.
A key aspect of Hezbollah’s possible re-armament is the role of Syria. Many
questions remain concerning Syria: the willingness of the United States and Israel to
bring Syria into the diplomatic mix, Syria’s influence over Hezbollah in a Lebanon
free of Syria’s military occupation, and what demands Syria may make in exchange
for its possible cooperation. Some observers suggest a variety of theoretical
incentives that the West could provide Syria, including the end of its isolation by the
United States and the removal of Syria from the State Department’s terrorism list and
the relaxation of economic sanctions; the tacit recognition of its influence in
Lebanese politics; the ratification of the EU Association Agreement with Syria that
provides it with certain trade benefits; diminished international pressure regarding
the U.N.-led investigation into the murder of former Lebanese Prime Minister Rafiq
Hariri; increased financial support, possibly from Arab Gulf states; and finally
(though less likely), a resumption of negotiations over the Israeli-occupied Golan
Heights - a longstanding Syrian goal since its defeat in the June 1967 Six-Day War.
Others believe that U.S. refusal to reward Syria for its intransigence should continue
and that any U.S. engagement would undermine Western efforts to strengthen
Lebanese independence and sovereignty, even if the unspoken reality is one in which
Syria’s special role in Lebanese affairs is widely recognized. After the recent attack
on the U.S. embassy in Damascus, some observers have asserted that the United
States and Syria share an interest in combating Islamic extremism and should renew
limited security cooperation and intelligence sharing.
Finally, speculation over the winners and losers of the war will most likely be
debated for some time. Israeli officials believe that their overwhelming response to
Hezbollah’s provocation caught it and Iran off-guard and that Israel’s subsequent
operations have eroded its opponents’ deterrent capabilities along the Israeli-
Lebanese borders. Nevertheless, there are many Israelis both in and out of the
government who believe that the war was poorly managed, did not achieve its goals,
or was simply ill-conceived. Hezbollah claimed that by merely surviving, it gained
a symbolic victory over the more powerful Israeli army and that it continued to
threaten Israel with rocket attacks after weeks of Israeli attempts to destroy its
arsenal. Iran may believe that it achieved an ideological victory against Israel, seeing

the conflict as producing increased Arab and Muslim support for Lebanese Shiites
and for overall Iranian opposition to Israel. Analysts caution that increased Arab and
Muslim support for Hezbollah may simply be a temporary phenomenon in response
to solidarity with the Lebanese people and sympathy for Lebanese civilian casualties.
Others see increasing domestic political pressure in moderate Arab states and
elsewhere, such as Egypt, Jordan, Saudi Arabia, and even Turkey to condemn Israel
and hold the United States partially responsible for civilian casualties in Lebanon as
a way to deal with popular anger and their own Islamists.

Appendix A: Prelude to the Crisis
The following was originally the opening section of this report and has been
included in the Appendix for use a resource on background to the July-August war.
It will not be updated.
Although Hezbollah’s July 12, 2006, kidnaping of two Israeli soldiers initiated
the conflict in southern Lebanon, tensions in the region had grown since the Hamas
electoral victory in Palestinian legislative elections in January 2006. Over the course
of the next six months, Israeli-Palestinian relations deteriorated rapidly, culminating
in renewed fighting in the Gaza Strip, only months after Israel withdrew entirely from
the territory and evacuated its settlements. Most observers assert that Hezbollah used
the clashes between Hamas and Israel as a pretext and justification for its July 12
attack. The following sections provide background on how the region was
transformed over six months from one of relative calm to full-scale war.
Palestinian Elections and the Hamas-led PA Government77
On January 25, 2006, candidates of the “Change and Reform” party associated
with the Islamic Resistance Movement (Hamas)78 won a majority in Palestinian
Legislative Council (PLC) elections, defeating Fatah, the prior ruling party of the
PLC and of Palestinian Authority President (PA) Mahmoud Abbas. In response, the
Quartet (i.e., the United States, European Union, United Nations, and Russia) stated
that “there is a fundamental contradiction between armed group and militia activities
and the building of a democratic state.”79 Subsequent Quartet statements established
clear principles for reviewing further engagement and assistance with the Hamas-led
Palestinian government, namely “that all members of a future Palestinian government
must be committed to non-violence, recognition of Israel, and acceptance of previous
agreements and obligations, including the Roadmap.”80 President Abbas endorsed
Hamas’ platform and cabinet candidates while expressing his demand that Hamas
comply with the Quartet’s principles and support his efforts to achieve a two-state
solution to the Israeli-Palestinian conflict.81 Since January 2006, Hamas leaders have
largely rejected and refused to discuss the Quartet principles, arguing that while
President Abbas may decide to negotiate with Israel, ultimately the Palestinian people
would decide what to accept.

77 The following sections were prepared by Christopher Blanchard, Middle East Policy
78 Hamas is an acronym for its full name in Arabic, Harakat al-Muqawamah al-Islamiyyah
(the Islamic Resistance Movement).
79 Quartet Statement on Palestinian Legislative Council Elections, January 26, 2006.
80 Quartet Statements released January 30, 2006, and March 30, 2006. “The Roadmap”
refers to the Performance-Based Roadmap to a Permanent Two-State Solution to the
Israeli-Palestinian Conflict, which was presented to Israel and the Palestinian Authority on
April 30, 2003, by the Quartet as a plan to achieve a comprehensive settlement of the
conflict in three phases by 2005.
81 The PLC approved the majority Hamas-bloc on March 28, 2006.

The Isolation of Hamas and Internecine Palestinian Violence
The electoral victory of Hamas surprised many outside observers and created
a series of policy challenges for the Bush Administration, which had supported the
election process as part of its efforts to reform the Palestinian Authority and its
broader Middle East democracy promotion agenda. Israel and members of the
Quartet took steps to limit the provision of non-humanitarian aid and financial
resources to the Hamas-controlled Palestinian Authority based on Hamas leaders’
refusal to accept the Quartet principles. Israel ceased its monthly transfers of
approximately $55 million in taxes and customs revenue collected monthly on behalf
of the PA, and two leading Israeli banks announced plans to sever their commercial
relationships with financial institutions in the West Bank and Gaza Strip.82 The Bush
Administration suspended U.S.-funded development projects in the Palestinian
territories and prohibited any and all U.S. persons from engaging in any unauthorized
transactions with the Palestinian Authority because of its control by Hamas, a
designated terrorist entity.83 The European Union — the PA’s largest donor — also
suspended its direct aid to the Palestinian Authority and, at the Quartet’s behest, has
subsequently spearheaded efforts to develop an international mechanism to deliver
assistance to the Palestinian people without transfers to or through Hamas or the
elements of the PA under its control.
The loss of customs revenue and direct foreign aid created crippling budgetary
shortfalls for the PA and significant derivative economic hardship for many
Palestinian citizens. President Abbas referred to the steps as a “siege,” and
throughout April, May, and June 2006, tensions over unpaid salaries and
disagreements over command responsibilities flared between the Hamas-led
government and armed security force personnel loyal to Fatah. Palestinian leaders,
including President Abbas, engaged in several efforts to end the intra-Palestinian
violence and bring closure to open questions of official Palestinian support for the
Quartet principles (see discussion of the National Accord Document below).
However, before these efforts could bear fruit, fresh violence between Israel and
Hamas erupted in the Gaza Strip and has escalated.
Israeli-Palestinian Fighting84
For many months prior to the late spring/summer 2006 outbreak of fighting,
violence had been somewhat subdued due to some self-imposed restraint by the
major players involved. In March 2005, Hamas and 12 other Palestinian groups
agreed to extend an informal truce or “calm” (referred to in Arabic as a hudna) with

82 Press reports suggested that Israel’s Bank Discount and Bank Hapoalim have agreed to
postpone their plans until August 15, 2006. The proposals would directly affect Palestinian
civilians by severely complicating or preventing most Palestinian commercial financial
transactions in Israeli shekels, the principal currency used in the West Bank and Gaza Strip.
83 For more information see CRS Report RS22370, U.S. Foreign Aid to the Palestinians, by
Jeremy M. Sharp and Christopher M. Blanchard.
84 The following sections were prepared by Carol Migdalovitz, Specialist in Middle Eastern
Affairs, on August 3, 2006.

Israel for one year. Some call the agreement a cease-fire even though it was a
unilateral Palestinian declaration to which Israel was not a party. Palestine Islamic
Jihad (PIJ) did not agree to the calm and was responsible for several suicide
bombings within Israel in the period that followed. Hamas, which had been
responsible for many suicide bombings during the second intifadah (Palestinian
uprising against Israeli occupation) that had begun in September 2000, refrained from
such attacks after declaring the hudna. It did, however, continue to fire mortars and
rockets against Israeli settlements in the Gaza Strip before Israel’s summer 2005
withdrawal from the region and into southern Israel after Israel’s withdrawal. Israel
usually responded with air and artillery strikes, but it also carried out what it terms
targeted killings of terrorists.
On June 9, 2006, a Palestinian family was killed on a Gaza beach. The
Palestinians claimed that the victims had been struck by Israeli artillery fire, but
Israel denied responsibility for the deaths. Nonetheless, the incident provoked
Hamas to call off its truce and intensify rocket fire into southern Israel.
Also in June, Palestinian factions held an intense national dialogue in the West
Bank and Gaza in which they ultimately agreed on a National Accord Document
(also known as the Prisoners’ Document because Hamas and Fatah leaders
imprisoned by Israel had collaborated on the first draft) to reconcile their positions
and goals. Hamas leaders in Damascus, notably political bureau chief Khalid
Mish’al, reportedly did not agree with the National Accord Document because it
might be seen as suggesting that Hamas had moderated its views regarding Israel and
the peace process. On June 25, members of the Hamas military wing (Izz ad-Din al-
Qassam Brigades) and two other groups attacked Israeli forces in Israel, just outside
of Gaza, killing two Israeli soldiers, wounding four, and kidnaping one. The
perpetrators demanded the release of Palestinian women and minors from Israeli
prisons. Some analysts suggest that Mish’al was behind the attack in order to assert
his power over more “moderate” Hamas officials in the territories and to undermine
the National Accord.
On June 27, after unsuccessful diplomatic efforts to secure the kidnapped
soldier’s release, Israeli forces began a major operation which Israel explained as an
effort to rescue the soldier, to deter future Hamas attacks including rocket launches
from Gaza into southern Israel, and to weaken, bring down, or change the conduct
of the Hamas-led Palestinian Authority government. Israeli officials claimed that
Hamas had crossed a “red line” with the kidnaping and attack within pre-1967 Israel,
but said that Israel did not intend to reoccupy Gaza.
On June 28, Hamas officials in the Palestinian Authority allied themselves with
the kidnappers by adopting their demands. Israeli officials responded by insisting on
the unconditional release of the soldier. On June 29, Israel forces arrested 64
Palestinian (Hamas) cabinet ministers, parliamentarians, and other Hamas officials
in the West Bank and Jerusalem in what the Foreign Ministry described the action
as a “normal legal procedure” targeting suspected terrorists.
In early military operations, Israeli planes bombed offices of PA ministries
headed by Hamas, weapons depots, training sites, and access roads; ground forces
entered Gaza to locate tunnels and explosives near the border and targeted Hamas

offices in the West Bank. After Hamas militants fired an upgraded rocket at the
Israeli port city of Ashkelon on July 4, the Israeli cabinet approved “prolonged”
activities against Hamas; air and artillery strikes and ground incursions are still
occurring. Meanwhile, Palestinian militants continue to fire rockets into southern
International mediators have tried to calm the recent upsurge in violence. The
Egyptians have reportedly proposed a resolution in which Hamas would release the
soldier in exchange for an Israeli promise to release prisoners at a later date. On July

10, however, Khalid Mish’al insisted on the mutual release or “swap” of prisoners.

On the same day, Israeli Prime Minister Ehud Olmert reportedly said that trading
prisoners with Hamas would cause a lot of damage to the future of the State of Israel,
perhaps because it would continue a precedent that he seeks to break.85 He later
observed that negotiating with Hamas also would signal that moderates such as
Palestinian Authority (PA) President Mahmud Abbas are not needed.
Abbas told a visiting U.N. team that he wanted to “de-link” the crisis in the
Palestinian areas from the crisis that developed subsequently between Israel and
Hezbollah in Lebanon in order to prevent non-Palestinian extremists (Hezbollah) from
hijacking the leadership of the Palestinian issue.86 Yet, neither President Abbas nor the
Hamas-led PA government officials represent the kidnappers and can bring about a
resolution. Hamas leader Mish’al appears to be in control of key elements in Hamas and
emphasizes the importance of cooperation between Hamas and Hezbollah and
specifically calls for not separating the Palestinian and Lebanese issues.87
Enter Hezbollah
On July 12, under cover of massive shelling of a town in northern Israel,
Hezbollah forces crossed the international border from Lebanon into northwestern
Israel and attacked two Israeli vehicles, killing three soldiers and kidnaping two.
Hezbollah thereby opened a second front against Israel ostensibly in support of
Hamas. Sheikh Hassan Nasrallah, Hezbollah’s leader, suggested that the Hezbollah
operation might provide a way out of the crisis in Gaza because Israel had negotiated
with Hezbollah indirectly in the past even though it refuses to negotiate with Hamas
now. He said that the only way the soldiers would be returned would be through a
prisoner exchange.88 Although Hezbollah and Hamas are not organizationally linked,
Hezbollah provides military training as well as financial and moral support to the
Palestinian group and has acted in some ways as a mentor or role model for Hamas,
which has sought to emulate the Lebanese group’s political and media success.
Hamas’s kidnaping of the Israeli soldier follows a different Hezbollah example.

85 “Olmert Says No Deal With ‘Bloody’ Hamas,”, July 10, 2006.
86 As reported to the U.N. Security Council, July 21, 2006, meeting record S/PV.5493.
87 Reported on Al-Jazirah Satellite Channel Television, July 31, 2006, Open Source Center
Document GMP20060731635002.
88 “Lebanon: Hezbollah Leader Holds News Conference on Captured Israeli Soldiers,” Al-
Manar Television, J:uly 12, 2006, Open Source Center Document, GMP 20060712617001.

Moreover, two groups share the goal of driving Israel from occupied territories and
ultimately eliminating it; both maintain close ties with Iran.
Possible Explanations for Hezbollah’s Attack. Nasrallah has publicly
espoused an intention to kidnap Israelis to effectuate a prisoner exchange.
Hezbollah, however, has the capacity to decide to act on its own and could have
done so in the spirit of “Shi’a triumphalism” spurred by the Iraqi Shiites’ ascension
to power and Iran’s pursuit of nuclear weapons. It also may have acted in solidarity
with the besieged Palestinians or with its Syrian and Iranian supporters. Another
explanation is that Hezbollah may have wanted to prevent a resolution of the Gaza
crisis. Egyptian President Hosni Mubarak and Palestinian Authority President
Mahmud Abbas have claimed that an agreement for a prisoner exchange had almost
been reached, immediately before the Hezbollah attack, but Hezbollah’s action
complicated or prevented it.89
Some observers question Hezbollah’s autonomy and offer other explanations
for the July 12 action. Much speculation focuses on whether Hezbollah acted at the
behest of or with the approval of Iran, its main sponsor, because Iran also supports
Hamas or may have wanted to divert international attention from the impasse over
its nuclear program. If the latter is the case, it gained only a limited time when the
U.N. Security Council postponed consideration of the nuclear issue due to the
Lebanon situation because, on July 31, the Council approved a resolution demanding
that Iran suspend its uranium enrichment program by August 31 or face sanctions.
Others suggest that Syria may be using its Hezbollah allies to resurrect its influence90
in Lebanon, from which it had been forced to withdraw in 2005.
Other experts give a more nuanced appraisal. U.S. CENTCOM Commander
General John Abizaid observed that it is more likely that Syria and Iran are exploiting91
the situation created by the kidnaping than that they ordered it. U.S. State
Department Coordinator for Counterterrorism Henry Crumpton reportedly asserted
that Syria and Iran do not control Hezbollah, but added that Hezbollah asks Iranian
permission if its actions have broader international implications.92 In this case,
Hezbollah may not have foreseen the implications of its July 12 operation and
expected “the usual, limited” Israeli response characteristic of the period since93

2000. Therefore, it may not have asked permission from Teheran.

89 “PA’s Abbas Speaks to Journalists on Palestinian, Lebanese Develoopments,” Al-Hayah
al-Jadidah, July 16, 2006, Open Source Center Document, GMP 200607116620002.
90 Syria already has benefitted somewhat from the conflict as the U.N. envoy investigating
the assassination of former Lebanese Rafiq Hariri, and possible Syrian involvement in that
killing, was evacuated from Beirut.
91 Greg Myre and Jad Mouawad, “Israel: Build up at Lebanese Lines as Fight Rages,” The
New York Times, July 22, 2006.
92 Sarah Baxter and Uzi Mahnaimi, “Iran’s President Recruits Terror Master,” Sunday Times
(London), April 23, 2006.
93 Observation of Mahmoud Komati, an Hezbollah political official, quoted by Greg Myre
and Helene Cooper, “Israel to Occupy Area of Lebanon as a Security Zone,” New York

Appendix B: Chronology of Conflict on the
Israeli-Lebanese-Syrian Border
DecemberIsraeli commandos destroy 13 passenger planes at the Beirut airport, in
1968reprisal for attack by Palestinian terrorists trained in Lebanon on an
Israeli airliner in Athens.
March 1978Israel invades south Lebanon and sets up a roughly 10-km (6-mile)
occupation zone. Most troops withdraw within weeks, leaving a
security area held by Israel’s Lebanese largely Christian allies, the
South Lebanon Army (SLA).
January 1979Israeli agents detonate a car bomb in west Beirut, killing Ali Hassan
Salameh, security chief of the Black September group. Salameh, known
as Abu Hassan, was one of the plotters of the Munich Olympics attack
against Israeli athletes in 1972.
June 1982Terrorist and rocket attacks by Lebanon-based Palestinian groups and
Israeli counter-strikes culminate in Israeli invasion of Lebanon. Syrian
army ousted from Beirut and thousands of Palestinian guerrillas under
Yasser Arafat depart for Tunisia by sea.
SeptemberIsrael captures Beirut after pro-Israel Christian leader Bashir Gemayel,
1982who had been elected president, is assassinated. Hundreds of civilians
in Palestinian refugee camps of Sabra and Shatila are killed by
Christian militiamen allied with Israel.
May 1983Israel and Lebanon sign peace agreement under U.S. patronage. Syria
opposes it, and it is never ratified.
March 1984Peace agreement with Israel is cancelled and Lebanese President Amin
Gemayel breaks with Israel under Syrian pressure.
June 1985Israel pulls back to a self-declared 15-km (9-mile) border security zone
in south Lebanon controlled by Israeli forces and their Lebanese militia
FebruaryIsraeli helicopter gunships rocket car convoy in south Lebanon, killing

1992Hezbollah leader Sheikh Abbas Musawi, his wife and six-year-old son.

July 1993Hezbollah launches rocket attacks on northern Israel. Israel unleashes
“Operation Accountability,” a week-long air, artillery and naval
April 1996After Hezbollah began shelling towns in northern Israel, Israel launched
“Operation Grapes of Wrath,” a 17-day campaign against Hezbollah
positions in south Lebanon. On April 18, Israeli artillery fire targeting
Hezbollah rocket crews falls in and around a U.N. refugee camp near
the village of Qana, killing 91 civilians and sparking international calls
for an immediate ceasefire, achieved on April 26.

93 (...continued)
Times, July 26, 2006.

June 1999The South Lebanon Army retreats from the Jezzine enclave north of the
Israeli zone it held for 14 years.
May 2000Israel ends 18-year occupation of south Lebanon. On June 18, 2000, the
U.N. Security Council certifies Israel’s withdrawal in accordance with
U.N. Security Council Resolution 425 (1978). Lebanon and Syrian
governments maintain that withdrawal is not complete since it did not
include the disputed Shib’a Farms enclave.
October 2003After a suicide bombing in Haifa killed 20 Israelis, Israel launches air
strikes against an alleged terrorist training camp at Ain Saheb,
northwest of Damascus, Syria.
SeptemberMonths before the assassination of former Lebanese Prime Minister

2004Rafiq Hariri, which was widely blamed on Syrian agents, the U.N.

Security Council passed Resolution 1559 calling for withdrawal of
“foreign forces” from Lebanon (Syria) and disarming of militia, such
as Hezbollah.
Source: Reuters, “Chronology - Israel’s interventions in Lebanon,” July 19, 2006.

Appendix C: Recent Legislation
Congressional Oversight
In response to the current crisis, Congress took swift steps to express its support
of Israel and that country’s “right to take appropriate action to deter aggression by
terrorist groups and their state sponsors,” and to urge “the President to continue fully
supporting Israel as Israel exercises its right of self-defense in Lebanon and Gaza.”
Some Members of Congress called on the President to appeal to all parties for an
immediate cessation of violence, to commit to multi-party negotiations, and
expressed support for an international peacekeeping mission in southern Lebanon.
Others called for “the cessation of targeting...of infrastructure vital to non-
combatants”; establishment of “a secure humanitarian corridor” for purposes of
evacuation and transporting of food and medicine to the civilian population; an
immediate cease-fire; and a “comprehensive and just solution”. House Resolution
954 called on the President to appoint a Special Envoy for Middle East Peace. A
Senate resolution, S.Res. 548, called on Syria and Iran to end their support for
Hezbollah, for the warring parties to reach a cessation of hostilities, and for
reconstruction to find international support.94
Legislation Providing Oversight
(in order of introduction)
Bill or PrimaryIntroduced/IntentStatus
Re s o l u t i on Sponsor Ref erred
S.Res. 53495FristJuly 18, 2006Congress’ support ofAgreed to by
directly toIsrael, support of thevoice vote,
floor PresidentJuly 18, 2006
H.Res. 921BoehnerJuly 18, 2006Similar to S.Res. 534Agreed to by
directly tovote of 410
floor— 8 (with 4
July 20, 2006
H.Res. 922AckermanJuly 18, 2006Similar to S.Res. 534No further

94 The following section was prepared by Dianne Rennack, Specialist in Foreign Policy
95 It was reported that some Members drafted a resolution that would have cast Lebanon’s
responsibility differently than those resolutions agreed to, and would have called for
restraint from all sides. See Flaherty, Anne Plummer. “House on Track to Voice Support
for Israel’s Military Campaign in Lebanon,” Associated Press, July 20, 2006. By contrast,
S.Res. 534 “urges all sides to protect innocent civilian life and infrastructure....” H.Res. 921
“recognizes Israel’s longstanding commitment to minimizing civilian loss and welcomes
Israel’s continued efforts to prevent civilian casualties”.

Legislation Providing Oversight
(in order of introduction)
Bill or PrimaryIntroduced/IntentStatus
Re s o l u t i on Sponsor Ref erred
H.Res. 923ShawJuly 18, 2006Similar to S.Res. 534No further
H.Res. 926IssaJuly 19, 2006Similar to S.Res. 534No further
H.Con.Res.KucinichJuly 19, 2006Support internationalNo further
450HIRCpeacekeeping missionaction
in Lebanon
H.Res. 945 Jackson-LeeJuly 25, 2006Cease targetingNo further
HIRCinfrastructure, establishaction
humanitarian corridor,
H.Res. 954LeachJuly 26, 2006Establish envoy forNo further
HIRCMiddle East Peaceaction
H.Res. 955FarrJuly 26, 2006Cease-fire, andNo further
HIRCrecognize Israel’s rightaction
to exist
S.Res. 548DoddAug. 3, 2006Calls on Syria and IranAgreed to by
directly toto end support toUnanimous
floorHezbollah; internationalConsent,
community to supportAug. 3, 2006

lasting solution and

Evacuation Costs for U.S. Citizens
In the early stages of U.S. government-supported evacuations of Americans
from Lebanon, the State Department required evacuees to sign promissory notes to
assume financial liability of the costs of their evacuation. Several Members of
Congress objected to this, noting that the law is ambiguous at best, and called on the
U.S. Secretary of State to waive the statutory requirements for reimbursement.96 On
July 18, 2006, after the Secretary of State consulted with some Members, the State
Department announced that such fees would be waived. Congress adopted two
measures increase funding available to the Social Security Administration to provide
temporary assistance to U.S. citizens returned from foreign countries (Public Law
109-250), to authorize the Secretary of State to redistribute funds within the State
Department’s budget to cover the costs of evacuations, and to increase funding
available to the State Department for such evacuations (Public Law 109-268). Other
legislation, as yet not enacted, proposed to change permanently the statutory basis
under which the State Department requests reimbursements, or replenish funds in the
budget of the Department of Health and Human Services that are expended once
evacuees have returned to the United States.
Legislation Relating to Evacuations
(in order of introduction)
Bill orPrimaryIntroduced/IntentStatus
Re s o l u t i on Sponsor Ref erred
H.R. 5828 DingellJuly 18, 2006Amends the StateNo further
HIRCDepartment Basicaction
Authorities Act of 1956 to
remove the reimbursement
requirement from
permanent law.
S. 3690 StabenowJuly 19, 2006Authorizes the Secretary ofNo further
SFRCState to cover the costs ofaction
evacuation related to the
Israel-Hezbollah crisis
without amending the
underlying statute.
H.R. 5865 ThomasJuly 24, 2006Amends the SocialP.L. 109-250
Ways andSecurity Act to increaseJuly 27, 2006

Meansnear-term funding for
assistance to newly
evacuated U.S. citizens.
96 § 4(b)(2)(A) of the State Department Basic Authorities Act of 1956, as amended (22
U.S.C. 2671), authorizes the Secretary of State to expend funds to evacuate “U.S. citizens
or third-country nationals, on a reimbursable basis to the maximum extent practicable”
“when their lives are endangered by war, civil unrest, or natural disaster”.

Legislation Relating to Evacuations
(in order of introduction)
Bill orPrimaryIntroduced/IntentStatus
Re s o l u t i on Sponsor Ref erred
H.R. 5873 SmithJuly 24, 2006Seeks to enact anNo further
HIRCamendment similar to thataction
in H.R. 5828.
H.R. 5869McDermottJuly 24, 2006Similar to H.R. 5865.No further
Ways andaction
S. 3741 Lugar July 26, 2006Authorizes the Secretary ofP.L. 109-268
State to move funds fromAug. 4, 2006
one account to another to
cover the costs of
evacuations. Increases
funding available to the
State Department for
evacuation expenses (Wolf
H.Res. 972 HastingsJuly 28, 2006Expresses the House’sNo further
HIRCappreciation to Cyprus andaction

Turkey for the roles each
played in sheltering

Appendix D: U.S. Sanctions97
Syria, Iran, Hamas, and Hezbollah — the states and entities that Congress has
noted for aggression against Israel, support for terrorism, or terrorist activities in the
current crises — are currently subject to fairly comprehensive U.S. economic
sanctions. The Secretary of State designated Syria and Iran as state sponsors of acts
of international terrorism, in 1979 and 1984 respectively, thus triggering a myriad
of statutorily required restrictions and prohibitions on aid, non-emergency
agricultural aid, trade, support in the international banks, and other economic98
transactions. Such a designation generally triggers a prohibition on all but the most
basic of humanitarian exchanges.99
Iran. Iran is also denied investment dollars intended for development of its
petroleum industry under the Iran and Libya Sanctions Act of 1996.100 Sanctions
available under this Act, to be imposed on those who engage in unlawful investment
in Iran, include a prohibition on Export-Import Bank funds, prohibition on exports,
denial of loans from U.S. financial institutions, denial of rights to financial

97 Prepared by Dianne Rennack, Specialist in Foreign Policy Legislation. For more on U.S.
economic sanctions imposed on Iran, see CRS Report RL32048, Iran: U.S. Concerns and
Policy Responses, by Kenneth Katzman. For Syria, see CRS Report RL33487, Syria: U.S.
Relations and Bilateral Issues, by Alfred B. Prados.
98 § 6(j) of the Export Administration Act of 1979 (P.L. 96-72; 50 U.S.C. 2405(j)), under which
the state sponsor of acts of international terrorism designation is made, authorizes the
curtailment of commercial trade in dual-use goods and technology to named countries. § 620A
of the Foreign Assistance Act of 1961 (P.L. 87-195; 22 U.S.C. 2371) prohibits most foreign aid,
non-emergency agricultural aid, Peace Corps programs, or Export-Import Bank funding to
designated countries. § 40 of the Arms Export Control Act (P.L. 90-629; 22 U.S.C. 2780)
prohibits government sales or leases of defense goods or defense services to named countries.
§ 505 of the International Security and Development Cooperation Act of 1985 (P.L. 99-83; 22
U.S.C. 2349aa-9) authorizes the President to ban the importation of goods and services from any
state found to support acts of international terrorism. § 1621 of the International Financial
Institutions Act (P.L. 95-118; 22 U.S.C. 262p-4q), § 6 of the Bretton Woods Agreements Act
amendments, 1978 (P.L. 95-435; 22 U.S.C. 286e-11) each state similar prohibitions relating to
international bank programs. § 502(b)(2)(F) of the Trade Act of 1974 (P.L. 93-618; 19 U.S.C.
2462) requires the withholding of favorable trade terms with cited countries. Annual foreign
operations appropriations measures usually restrict or prohibit most forms of aid to designated
countries. Other legislation prohibits certain transactions with countries found to be not
cooperating with U.S. antiterrorism efforts, and still other legislation prohibits or curtails
economic relations with third countries that aid terrorist-designated states.
99 Some trade, albeit highly restricted, is allowed with Iran and Syria. U.S. exporters may,
for example, market agricultural commodities, medicines, and medical supplies to countries
designated as supporters of international terrorism under terms of the Trade Sanctions
Reform Act of 2000 (P.L. 106-387; 22 U.S.C. 7201 et seq.). Suppliers may provide spare
parts related to civil air safety. U.S. persons may import and export informational material
and propaganda. And since 2000, in an attempt through trade diplomacy to open relations
with Iran, one may import nuts, dried fruit, caviar, and carpets from that country.
100 P.L. 104-172 (50 U.S.C. 1701 note). This Act no longer applies to Libya, following the
President’s determination that the country was in compliance with terms of the Act
(Presidential Determination No. 2004-30; 69 F.R. 24907; May 5, 2004).

institutions to participate as a dealer in U.S. debt instruments, denial of procurement
contracts, and any other transaction the President wishes to restrict if the authority to
do so also is stated under the International Emergency Economic Powers Act
(IEEPA). Petroleum-related investments are restricted also by Executive Order, and
all new investments, regardless of the industry, are also restricted under the IEEPA.101
Syria. Although Syria has been identified as a state sponsor of acts of international
terrorism since 1979, regulations that implement restrictions on trade and transactions
with that country are less restrictive than those that pertain to other designated countries,
reportedly because Syria is considered instrumental in the Middle East peace process.
Congress took this into account when it sent the Syria Accountability and Lebanese
Sovereignty Restoration Act of 2003 to the President.102 The act, triggered by
increasingly organized and forceful efforts in Lebanon to shed itself of foreign forces,
and reflecting recent statements from the Bush Administration targeting Syria’s
involvement with terrorism, development and trade of weapons of mass destruction, and
support of the insurgency in Iraq, requires the President to curtail trade and transactions
until certain conditions are met. The act requires the denial of export licenses for any
item on the U.S. Munitions List (USML) or Commerce Control List (CCL). The act also103
requires the President to impose two or more of the following restrictions:
!prohibit export of all products (except food and medicine, as made
exempt by the Trade Sanctions Reform Act of 2000);
!prohibit investment in Syria;
!restrict travel of Syrian diplomats to only the environs of
Washington, DC and the United Nations in New York;
!prohibit Syrian-owned air traffic in or over the United States;
!reduce diplomatic contact; and
!block transactions in property.
The President implemented terms of the Syria Accountability and Lebanese
Sovereignty Restoration Act on May 11, 2004, by complying with the mandatory
restrictions on USML and CCL exports, and by prohibiting U.S. exports and104
restricting Syrian air traffic.
Lebanon. For FY2003 and each fiscal year thereafter, of any Economic
Support Funds allocated or obligated to Lebanon, $10 million shall be withheld:

101 Petroleum-related investments in Executive Order 12957 (March 15, 1995; 60 F.R.

14615; 50 U.S.C. 1701 note); other new investments in Executive Order 12959 (May 6,

1995; 60 F.R. 24757; 50 U.S.C. 1701 note); and a consolidation of earlier orders in
Executive Order 13059 (August 19, 1997; 62 F.R. 44531; 50 U.S.C. 1701 note).
102 P.L. 108-175 (22 U.S.C. 2151 note).
103 The act provides the President the authority to waive the application of sanctions if he
finds it in the national security interest of the United States to do so (§ 5(b)).
104 Executive Order 13338 (69 F.R. 26751; May 13, 2004). The Order also cited the
National Emergencies Act and the International Emergency Economic Powers Act as its
underlying statutory basis.

unless and until the President certifies...that
(1) the armed forces of Lebanon have been deployed to the
international recognized border between Lebanon and Israel;
(2) the Government of Lebanon is effectively asserting its authority105
in the area in which such armed forces have been deployed.
To date, the President has not certified that these conditions have been met.
Congress, however, has ensured that the $10 million would be made available each
year by overriding the restriction. Annual foreign operations appropriations measures
have provided assistance to Lebanon “notwithstanding any other provision of law.”106
Hamas and Hezbollah. In 1995, the President identified Hamas and
Hezbollah as Specially Designated Terrorists (SDT) that threaten to disrupt the Middle
East peace process and authorized the blocking of all assets and of transactions with
persons associated with either organization.107 Subsequent legislative and executive
initiatives led to the creation of several other lists. Enactment of the Anti-Terrorism
and Effective Death Penalty Act of 1996, which also authorizes deportation or
exclusion from entry into the United States, generated the Foreign Terrorist
Organization (FTO) list.108 The President issued an executive order to create the
Specially Designated Global Terrorists (SDGT) list in the wake of events of September
11, 2001.109 All these lists were subsequently consolidated into one Specially
Designated Nationals and Blocked Persons list (the “SDN list”), administered by the
Department of the Treasury’s Office of Foreign Assets Control in 2002.110 Hamas and
Hezbollah, or individuals associated with each, are on each of the lists.

105 § 1224 of the Security Assistance Act of 2002 (division B of the Foreign Relations
Authorization Act, Fiscal Year 2003; P.L. 107-228; 22 U.S.C. 2346 note).
106 Most recently, in sec. 534(a) of the Foreign Operations, Export Financing, and Related
Programs Appropriations Act, 2006 (P.L. 109-102).
107 Executive Order 12947 (January 23, 1995; 60 F.R. 5079; 50 U.S.C. 1701 note). Each of
the executive orders cited in this paragraph are issued under the authority vested in the
President in the National Emergencies Act (P.L. 94-412; 50 U.S.C. 1601 et seq. ), and § 203
of the International Emergency Economic Powers Act (P.L. 95-223; 50 U.S.C. 1702).
108 Anti-Terrorism and Effective Death Penalty Act of 1996 (P.L. 104-132), particularly as
it amends the Immigration and Nationality Act at § 219 (8 U.S.C. 1189).
109 Executive Order 13224 (September 23, 2001; 66 F.R. 49079).
110 Office of Foreign Assets Control SDN list: [
ofac/sdn/index.shtml ]