Hezbollah and allies resign, toppling Lebanon government
BEIRUT (Reuters) - Ministers from Hezbollah and its allies resigned on Wednesday, toppling the Lebanese government of Prime Minister Saad al-Hariri before expected indictments against the Shi'ite group over the killing of Hariri's father.
Lebanese politicians had said on Tuesday that Saudi Arabia and Syria failed to reach a deal to contain tensions over the U.N.-backed tribunal, which is expected to issue draft indictments soon over the 2005 assassination of Rafik al-Hariri.
The ministers resigned as Saad al-Hariri was meeting U.S. President Barack Obama, and the White House later released a statement criticizing Hezbollah's moves and warning against any "threats or action" that could destabilize Lebanon.
Hariri's office said he left Washington after the talks, heading for Paris to meet President Nicolas Sarkozy on Thursday. France Info public radio said Hariri landed late on Wednesday in Paris.
Sarkozy's office said the meeting would take place at around 7:15 p.m. (1:15 p.m. EST) on Thursday.
It said that Sarkozy discussed the situation in Lebanon with Syrian President Bashar Al-Assad and sent a message of support to Lebanese President Michel Suleiman.
Analysts said the resignations could set the stage for protracted political turmoil in Lebanon.
They played down prospects of a repeat of the violence of May 2008, when gunmen took over Beirut after government moves against Hezbollah. But Sunni power Saudi Arabia, which backs Hariri, warned the resignations "will cause clashes once again."
The Shi'ite Hezbollah has denied any role in the 2005 killing. Its leader, Sayyed Hassan Nasrallah, has attacked the tribunal as an "Israeli project" and urged Hariri to renounce it. The Sunni Muslim premier has resisted Hezbollah's demand.
Announcing the resignations, Christian government minister Gebran Bassil blamed Washington for obstructing the Saudi-Syrian efforts and called on Lebanon's president to "take the required steps for forming a new government."
A stalemate over the tribunal has crippled Hariri's 14-month-old "unity" government. The cabinet has met, briefly, just once in the last two months and the government could not secure parliamentary approval for the 2010 budget.
U.S. Secretary of State Hillary Clinton said Lebanon's coalition crisis was a transparent attempt to subvert justice, but vowed that the work of the U.N.-backed tribunal would go on.
"The work of the special tribunal must go forward so justice can be served and impunity ended," Clinton told a news conference in Doha, Qatar, where she is attending a meeting of regional leaders.
"This is a matter that should be allowed to proceed as previously agreed to. This is not only about the tragic assassination of former Prime Minister Hariri, but many other people died and were injured as well," she said.
Twenty two other people died in the huge truck bomb that killed Rafik al-Hariri.
Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani said Qatar had no plans to mediate as it has in previous Lebanese political crises, but added that the Gulf region hoped the Saudi initiative to find a solution could still move forward.
Lebanon has endured a series of crises since Rafik al-Hariri's killing, including assassinations and sectarian street fighting in Beirut in 2008, and analysts said Wednesday's resignations would revive fears of instability.
Saudi Foreign Minister Prince Saud al-Faisal urged Hezbollah, which is backed by Iran and Syria, to rejoin the government.
Political scientist Hilal Khashan said Washington had "vetoed" the Saudi-Syrian initiative and there was little prospect of a new government being formed quickly.
The Saudi-Syrian proposals were never spelt out by either country. According to a politician close to Hariri, they would have involved a Hezbollah pledge not to resort to violence if its members were indicted, while Hariri would ensure that any indictment was not exploited to Hezbollah's political detriment.
U.N. Secretary General Ban Ki-moon called for continuing dialogue among all parties and reiterated his support for the tribunal's work, a U.N. spokesperson said in a statement.
Khashan said that while Hezbollah was unlikely to provoke a repeat of the May 2008 violence, he did not rule out protests.
"The phenomenon of food riots is spreading in the Arab world, so the opposition may shield itself behind popular demands for combating inflation," he said.
Beirut's bourse fell 3.22 percent in response to the political turmoil, with shares in market heavyweight Solidere, which has led the reconstruction of Beirut since the 1975-90 civil war, dropping as much as 8.0 percent.
"(Because) the agreement between Saudi Arabia and Syria was blocked, we have seen a sell-off," said Louis Karam, senior investment adviser at Arab Finance Corporation.
But Marwan Barakat, head of research at Lebanon's Bank Audi, said Lebanon's substantial foreign reserves and high levels of liquidity in the banking sector meant that it had a formidable "defense line" to protect its currency.
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.