Threat of Wider Mideast War Grows

Karby Leggett, Jay Solomon and Neil King Jr., The Wall Street Journal:

Israel's escalating incursion into Lebanon -- with bombing attacks on Beirut's airport and a naval blockade -- could turn its border fight with militant Islamists into a regional war that Israel is openly warning might lead to Syria, and beyond that to Iran.

Already the violence has engaged the Israeli military on two fronts, against Hezbollah militias in Lebanon to the north and Hamas forces that control the Palestinian government in the Gaza Strip to the west. But with Hezbollah sending dozens of rockets into Israel and striking the port city of Haifa, and Israel inflicting extensive infrastructure damage, the stakes have grown starkly higher. Israel now is fighting not with Palestinians or Arab nations, as in the past, but with the forces of radical Islam.

And the Israelis are bluntly saying that the blame for the violence by those forces lies in large measure with the governments of Syria and Iran for giving them support and encouragement -- an assertion that could put the U.S. and Israel on diverging paths in the crisis. "The real masterminds [behind these acts] are in Tehran and Damascus," Daniel Ayalon, Israel's ambassador to Washington, said Thursday. The international community "needs to call Iran to task," he said. READ MORE

Mr. Ayalon and other Israeli officials said their forces will continue operations in Lebanon and the Palestinian territories to root out the military backbone of Hezbollah and Hamas. Ultimately, they say, true stability will require reining in Iranian support of militia groups.

While the Bush administration is largely sympathetic with Israel's plight, and also eager to restrain Iran, it is unlikely to be as keen to directly confront Tehran now. With U.S. troops tied down in Iraq and a serious diplomatic drive under way at the United Nations to impose economic sanctions to get Iran to curb its nuclear program, the White House has little desire for a broader regional conflict that could bring a head-on clash with Iran right now.

It also would be difficult to bring along American allies in a direct confrontation with Iran. Israel has been warning for several years that Iran, much more than Iraq, has emerged as the Middle East's biggest problem and that Tehran's government represents a challenge Israel shouldn't have to confront alone. But it has found few countries willing to share that burden.

As a result, the Bush administration faces an immediate decision on what it can do to contain the violence while allowing Israel to defend itself and its soldiers, three of whom have been kidnapped in recent days by Hamas and Hezbollah. Two senior American officials -- Assistant Secretary of State David Welch and White House Middle East adviser Elliott Abrams -- met with Israeli Prime Minister Ehud Olmert Thursday. The U.S. said the best vehicle to defuse the crisis might be a United Nations delegation that is heading to the region at the behest of Secretary General Kofi Annan.

The unfolding crisis also rattled financial markets. The specter of broad Middle East instability boosted crude oil for August delivery 2.3% to a nominal record of $76.70 a barrel at the New York Mercantile Exchange. That helped push stocks lower, wiping out more than half the Dow Jones Industrial Average's gains so far this year as the blue-chip average slid 166.89 points, or 1.5%, to 10846.29.

Within the region, the outbreak of fighting already has had broad impact. It has gravely imperiled the fragile move toward democracy in Lebanon that the U.S. was trying to foster as a shining example for the rest of the Mideast. It also has destroyed any hope that Israel's own new government could continue pulling back from confrontation with Palestinians.

The high-speed escalation of violence in Lebanon comes in response to attacks on Israeli soldiers by Hezbollah fighters who crossed into Israel this week to launch attacks and kidnap two Israeli soldiers. Three runway bombings forced Beirut's Rafik al-Hariri International Airport to close, stranding passengers seeking to enter and exit Lebanon. The Israeli navy imposed a blockade along Lebanon's coast, shutting down the main channel for imports and exports.

In other parts of the country, Israel bombed roads and bridges, Hezbollah offices and the Al Manar TV station the militant group runs. Two days of Israeli bombings -- the heaviest air campaign against its neighbor in 24 years -- had killed 47 Lebanese and wounded 103, Lebanese Health Minister Mohammed Jawad Khalife said.

Hezbollah fired rockets Thursday into northern Israeli towns and said it was using a new missile that appeared more advanced than previous models. The rocket that hit Haifa, some 30 miles south of Lebanon's border, marked the deepest Hezbollah forces have ever struck inside Israel.

One Israeli was killed and more than 35 were injured, Israeli officials said. Eight Israeli soldiers also have been killed in the past two days.

Israel said its assault is meant to block the means by which Hezbollah imports weaponry and other goods. It also made clear that it aims to pressure the Lebanese government to take action against the militants. Hezbollah, a Shiite Muslim group, joined the Lebanese government last year following its strong showing in national elections. Hezbollah did so in part to derail international efforts to force it to disarm following the withdrawal of thousands of Syrian troops from Lebanon.

In his public comments Thursday, President Bush laid blame for the flare-up firmly on Hezbollah and Hamas, while cautioning Israel not to do anything that would weaken the "fragile democracy" in Lebanon. "Israel has a right to defend herself," he told reporters while in Germany. "Every nation must defend herself against terrorist attacks and the killing of innocent life. It's a necessary part of the 21st century."

At the U.N., the U.S. stood alone in vetoing an Arab-sponsored resolution demanding that Israel call off its offensive in the Gaza Strip. Mr. Bush found some support in Berlin, where German Chancellor Angela Merkel spoke strongly in support of Israel. Mr. Bush was seeing the German leader as he made his way to a summit meeting of the Group of Eight leading nations in St. Petersburg, Russia, this weekend. The world response to the Mideast fighting now is certain to be a significant agenda item there.

Mr. Bush and his top aides have pursued a hands-off approach toward Israel since cutting off contacts with late Palestinian leader Yassir Arafat in 2002, and there was little Thursday to suggest that approach had changed. But the next few days will test whether that approach continues in the current crisis.

Test of U.S.-Israel Relations

The situation also will test whether the U.S. and Israel see eye-to-eye on how to handle Syria and, more important, Iran. Thursday, Secretary of State Condoleezza Rice echoed the Israeli assertion that those two nations bear responsibility for the unrest, saying they were encouraging the attacks and, in the case of Syria, "sheltering the people who are perpetrating these acts."

The U.S., Ms. Rice added, isn't going to "try to judge every single act" the Israelis make. When asked if the fighting might spread to other countries, she said she doesn't intend "to speculate on apocalyptic scenarios."

Mr. Bush has been in a diplomatic stand-off with Iran over its nuclear program -- a showdown that some analysts think actually may be fueling Tehran's desire to stir up trouble in the region. Iran, some U.S. and Middle Eastern officials suspect, may be eager to demonstrate to Washington its ability to harm American interests if the White House pursues a coercive policy to stop Iran's nuclear programs.

They also suspect Iran has been emboldened by U.S. military setbacks in Iraq to think it has more of a free hand to spread its influence across the region, partly through proxies such as Hezbollah and Hamas. At the same time, though, there is considerable debate over how much control Iran actually exercises over the groups. Some Israeli and American analysts think Hezbollah wouldn't be acting in Israel without direct orders from Tehran, but others disagree.

In any case, Mr. Ayalon, the Israeli ambassador, declined to respond to the question of whether Israel would itself attack Iran for allegedly masterminding Hezbollah's activities. But a number of U.S. lawmakers said they believe the Bush administration needs to be taking an increasingly aggressive stance to prevent Tehran from expanding its influence in the Middle East.

"Iran is calling the shots here," said Rep. Brad Sherman, a Democrat from California. "These kidnappings wouldn't have occurred without the support from the highest ranks in Iran."

For now, the Bush administration appears to think it is making slow but steady progress in dealing with Iran by escalating pressure at the U.N. Thursday, the U.S. and other members of the Security Council's five permanent seat holders said they are referring Iran back to the council for its failure to respond to an offer of talks on its nuclear program. Such a move could ultimately lead to economic sanctions against Tehran, though countries such as Russia and China have indicated they might not support such penalties. Now, the Security Council could also be the forum through which to pressure Iran to end its support of Hezbollah and Hamas.

At the same time, U.S. officials said they are also concerned that al Qaeda and its affiliates could increase their activities around Israel as a result of the current unrest. In recent months, these officials say, groups claiming ties to al Qaeda have unleashed attacks in territory bordering Israel, such as Jordan, Egypt and the Palestinian territories.

Setback for Bush Vision

Regardless of the tactics used now to damp violence, the growing conflict could become a significant setback for the Bush administration's vision for the region. Mr. Bush and many of his neoconservative strategists said in the months leading up to the Iraq invasion that toppling Saddam Hussein would make Israel and secular Arab states safer. These officials claimed Mr. Hussein's ouster would allow secular democratic governments to flourish, while depriving Palestinian terrorists of one of their major sponsors in Baghdad.

Friday, many Middle East analysts say the Iraq war has made Israel significantly less safe. Iran has used the conflict to project its influence across Iraq and the Persian Gulf region. Al Qaeda, meanwhile, has developed a safe haven in western Iraq that it has used to launch attacks.

"In some important ways, the regional environment is less favorable to Israel than it was before we invaded Iraq," says Flynt Leverett, who directed Middle East affairs in the White House during the first Bush term. "If you look since 2003, Iran has emerged as a more powerful state under a hard-line leadership."

Another concern is whether Lebanon's $20 billion economy can weather the storm. The current violence comes amid the peak of Lebanon's tourist season, which has seen Beirut's hotels, restaurants and bars packed in recent weeks. After collapsing during the 1975-90 civil war, the tourist industry has rebounded strongly in recent years to become a leading driver of growth. Now, with transportation shut down and the conflict escalating, the industry faces an uncertain future.

A swift decline in tourism, along with pressure on other parts of the economy -- including soaring oil prices -- could push Lebanon's economy into recession and possibly force the government to default on its nearly $40 billion debt. Even before the attacks, the International Monetary Fund was urging Lebanon to undertake drastic measures to escape a looming debt crunch.

A debt crisis could stir deep tension within the ruling coalition, where Hezbollah holds two ministerial seats.

There were clear strains Thursday as some members of the coalition voiced displeasure with Hezbollah's actions while others supported them. The split extended into the foreign ministry, where the country's ambassador to the U.S. was recalled by the government after voicing support for the kidnappings.

A paralyzed -- or collapsing -- Lebanese government would add an element of instability to the Middle East and set back to U.S. efforts to spread democracy in the region. Some military and political analysts say an Israeli-imposed economic crisis could ultimately boost support for Hezbollah, which runs a vast social-services network funded independent of the Beirut government.

Write to Karby Leggett at karby.leggett@wsj.com, Jay Solomon at jay.solomon@wsj.com and Neil King Jr. at neil.king@wsj.com