LEBANON: SCENESETTER FOR APHSCT TOWNSEND

C O N F I D E N T I A L SECTION 01 OF 03 BEIRUT 003482

SIPDIS

SIPDIS

WHITE HOUSE FOR HINNEN/TAYLOR/PEARSON
NSC FOR ABRAMS/DORAN/MARCHESE/HARDING

E.O. 12958: DECL: 10/30/2016
TAGS: IS LE PGOV PREL PTER SY
SUBJECT: LEBANON: SCENESETTER FOR APHSCT TOWNSEND

REF: WHITE HOUSE 2981822

Classified By: Charge d'Affaires Christopher W. Murray. Reason: Sectio
n 1.4 (b).

INTRODUCTION
--------------


1. (C) Welcome to Beirut. Your visit occurs ten weeks
after the 34-day conflict between Israel and the terrorist
organization Hizballah that transpired from July 12 to August

14. That conflict was, according to Lebanon's Prime Minister
Fouad Siniora, the most destructive in Lebanon's history.
Although casualty figures did not approach the 1982 Israeli
incursion nor the violent 1975-1990 sectarian civil war, the
suddenness of this war's onset and the widespread destruction
of numerous villages and civilian infrastructure,
particularly in south Lebanon and in the southern suburbs of
Beirut, has shaken the political and social fabric of the
country.


2. (C) That said, the war may also have created some
additional political space for democracy and reform where
little existed before. Despite its initial claims of a
"divine victory" and heavy condemnation of Israel's war
fighting tactics, Hizballah itself has recently been
subjected to unprecedented criticism from elements in the
Sunni, Christian, and Druze communities. Even some moderate
figures in the usually monolithic Shia community in Lebanon
are quietly asking whether the human and material cost of the
violent conflict was worth it.


3. (C) Pro-reform leader PM Fouad Siniora came out of the
conflict with widespread admiration for his statesmanship and
national (vice confessional) leadership qualities. His
adroit political balancing act during the war and its
immediate aftermath has given Siniora greatly increased
credibility and a much broader power base. But these
advantages are counter-balanced by a wounded, yet still
lethal, Hizballah adroitly led by Hassan Nasrallah, and an
increasingly critical opponent in the person of former
General Michel Aoun, both of whom are now persistently
demanding that the Siniora Government either resign or
transform itself into a broader-based "unity government,"
which would likely decrease the ability of the pro-reform
movement to implement badly needed economic and political
changes.


4. (C) In summary, the Lebanese ship of state enjoys the
critical advantage of having a dedicated, competent,
pro-reform Prime Minister, but it is sailing through perilous
waters. The regressive Syrian regime rarely misses a chance
to threaten the fragile Lebanese government and is deeply
involved, along with its strategic ally Iran, in attempts to
destabilize the country. Hizballah, with its two ministers,
makes even the simplest decision in the Council of Ministers
extremely difficult and time consuming. Much depends on the
success of the just-beginning post-conflict reconstruction
effort. If the Siniora Government is perceived as an honest,
competent provider of services for all of the country's
sectarian communities, it will help solidify democratic and
market-oriented institutions. But if Syria, Hizballah, and
dissatisfied parties such as Michel Aoun's Free Patriotic
Movement, obstruct and even hijack the reconstruction
process, Lebanon will be in for difficult times.

BRIEF REVIEW OF EVENTS
LEADING UP TO THE CONFLICT
--------------


5. (SBU) The destabilizing presence of the armed terrorist
organization Hizballah in Lebanon was a situation that the
international community and reform elements in Lebanon found
intolerable. In September 2004, the UN Security Council
passed UNSCR 1559, whose objective was the re-establishment
of a sovereign Lebanese state and a disarmed Hizballah. This
effort to regain Lebanon's independence was answered with
violence by those elements that wished to preserve the status
quo of Syrian domination.


6. (SBU) The brutal assassination of former Prime Minister
Rafiq Hariri and 22 others on February 14, 2005, brought the
Lebanese people to the streets demanding an end to violence

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and foreign interference in Lebanon's internal affairs. Two
months later, Syria withdrew its military forces from
Lebanon, ending almost thirty years of occupation. The
international community expressed its solidarity with the
people of Lebanon with the passage of UNSCR 1595, which
authorized an international investigation into Hariri's
murder. The U.S. also supported the efforts of the UN and
the Lebanese government to create a tribunal, per UNSCR 1644,
with international elements to bring to justice those
responsible for this crime.


7. (SBU) In July 2005, democratic parliamentary elections
were held that, even though handicapped by the use of an old
Syrian-drafted election law, were considered by the EU and UN
to have been fair and open. Those elections resulted in the
establishment of a pro-reform government under the leadership
of Prime Minster Siniora. In an effort to create political
consensus, the Siniora government included two ministers
allied with Hizballah (one of which is actually a Hizballah
member, a first in Lebanon's history). That decision has had
lasting repercussions, as the Hizballah ministers, along with
their Amal allies, have made it difficult to institute
political and economic reform, not to mention an effective
implementation of UNSCR 1559.


8. (SBU) Despite these difficulties, Lebanon was settling
in to a highly anticipated summer season of stability and
economic recovery when Hizballah-initiated hostilities broke
out on July 12.

34 DIFFICULT DAYS
--------------


9. (C) Politically, the conflict was an extremely difficult
test for the still fragile pro-reform Siniora government. To
maintain national unity, Prime Minister Siniora was forced to
regularly express at least nominal support for the
"resistance" even though he was well aware that Hizballah was
operating according to Syrian and Iranian dictates, and would
probably work to bring down his Government if it could.


10. (C) During the last ten days of the conflict, Prime
Minister Siniora conducted an almost non-stop series of
negotiations that resulted in the adoption of UNSCR 1701 on
August 11, 2006. Prime Minister Siniora was able to win
concessions for Lebanon, particularly on the issues of IDF
withdrawal and LAF deployment in south Lebanon, but he must
now deliver on several difficult commitments.

POST-CONFLICT SITUATION IN LEBANON
--------------


11. (C) Although the immediate humanitarian relief effort
went off surprisingly well due to an unprecedented outpouring
of international aid and a well-established network of
domestic aid agencies, the arguably more important
reconstruction effort is encountering obstacles.


12. (C) The primary challenge is executing the selection,
prioritization, and coordination of reconstruction projects
in the midst of Lebanon's unique confessional system, where
each sectarian community carefully monitors what the other
communities are receiving. But it would be difficult to
argue that the country's Shia community, located in Beirut's
southern suburbs, in the cities and villages south of the
Litani River, and in largely Hizballah-controlled areas of
the Biqa Valley, did not suffer the greatest losses in the
conflict -- both in lives and material destruction. Several
Shia villages in south Lebanon, such as Bint Jbeil, Maroun al
Ras, and Khaim, were essentially leveled in the difficult
fighting of early August.


13. (C) Second, the various Ministries do not have a
particularly stellar record of providing services anywhere in
the country. Despite its many demographic and geographic
advantages, Lebanon still suffers from sub par infrastructure
-- the road system is in poor shape, the electrical system is
archaic and insufficient for the country's needs,
telecommunications is expensive and inefficient, and the
public school system operates close to systemic failure. For
these reasons, it is incumbent that Prime Minister Siniora
and his Council of Ministers place renewed emphasis on
achieving major structural reforms to win back the confidence

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of the Lebanese people.

RECONSTRUCTION
--------------


14. (SBU) The success of the Stockholm Conference for
Lebanon's Early Recovery, during which more than USD 900
million was pledged by the international community to address
Lebanon's immediate needs and begin the transition from
emergency to reconstruction efforts, was a promising start.
For its part, the United States pledged approximately USD 230
million, as part of a comprehensive economic assistance
package, which when implemented, will help Lebanon's economy
develop in a more efficient and transparent manner.


15. (C) Prime Minster Siniora's practical approach to
reconstruction, particularly concerning international
donations of assistance, is to allow donating countries and
agencies to "adopt" projects and carry them through from
design to completion. This approach, though creative, still
requires the Government's guidance and prioritization.
Embassy Beirut, along with our diplomatic allies, are
attempting to assist the Office of the Prime Minister in this
reconstruction effort, but it remains to be seen how things
will ultimately turn out.

CHALLENGES
--------------


16. (C) Besides reconstruction and economic recovery,
Siniora's government faces two other major challenges.
First, Lebanon has obligations under UNSCR 1701 to secure its
borders and stop arms smuggling. UNIFIL's enhanced mandate
and numbers in south Lebanon, along with the historic
Lebanese Armed Forces deployment to the south (authorized by
Siniora's Cabinet),should restrict the maneuverability of
Hizballah forces there. But, while there has been some
interdiction of weapons shipments since the cessation of
hostilities, the jury is still out as to whether the steps
Lebanon is taking at its seaports, airport, and land borders
are sufficient to prevent the resupply of Hizballah. Lebanon
has asked for assistance from Germany and the UN, but we have
urged Lebanon to ask for more help in this area.


17. (C) Second, the GOL will at some point have to deal
with the essence of the problem that brought war upon Lebanon
in July: the existence inside the state of a militia that is
not publicly accountable. Most Lebanese understand that no
state can tolerate the presence of a group more heavily armed
than the state itself. Additionally, UN Security Council
resolutions 1559 and 1701, inter alia, called for the
disarmament of all armed groups in Lebanon that are not under
control of the state. Furthermore, Prime Minister Siniora
has won Cabinet approval for his policy that the state must
enjoy a monopoly on arms, and the international community
stands ready to support a Lebanese-led process that leads to
Hizballah's disarmament. Finally, we encourage the Siniora
Government to do even more to achieve this critical goal.

SUMMARY
--------------


18. (C) At present, the pro-reform government of Prime
Minister Siniora is our best hope for the gradual development
of a stable, democratic, and prosperous Lebanon. If the
Prime Minster and his pro-reform allies are successful,
Lebanon could provide a dynamic model for those regional
states seeking to redress the damage caused by decades of
static, autocratic rule and who wish to transition to modern,
market-oriented societies.


19. (C) The U.S. and the international community, through a
series of UN Security Council resolutions, have sought to
provide Lebanon with the protection it needs from those
regional states, specifically Iran and Syria, which clearly
wish to use it as a pawn for their hegemonic ambitions.
Reliable, generous, long-term support is needed by this
developing democracy. It will take time, but if Iranian and
Syrian ambitions can be thwarted in Lebanon, the resulting
advantageous impact in the region will be undeniably
significant.
MURRAY