Lebanon dialogue skewed by Hezbollah power play

By Alistair Lyon, Special Correspondent - Analysis

BEIRUT (Reuters) - Any deal among rival Lebanese leaders invited to Qatar for talks to defuse Lebanon's crisis will reflect the new power equation imposed by Hezbollah's military punishment of its U.S.-backed foes last week.

High-level Arab League mediators announced in Beirut on Thursday that pro-government factions and the Hezbollah-led opposition had agreed to meet in Doha on Friday to seek to break their country's political deadlock.

"The dialogue has good prospects for the simple reason that the government doesn't have many options at this point," said Oussama Safa, head of the Lebanese Centre for Policy Studies.

The Arab mediators flew to Beirut on Wednesday to try to halt the bloodiest fighting among Lebanese since the 1975-90 civil war. At least 81 people were killed and 250 wounded.

The conflict is linked to a wider contest pitting the United States and Saudi Arabia against Iran and Syria, which both back Hezbollah, a powerful Shi'ite Islamist group determined to keep its arms to fight Israel -- to the alarm of many other Lebanese.

Even if a deal is patched up in Doha, it will not heal deep rifts over Hezbollah's arsenal or competing visions of Lebanon's destiny: a country mobilized for open-ended "resistance" or a Western-leaning one focused on business, tourism and pleasure.

The talks will cover electing a president, forming a national unity government and revising the electoral law -- issues at the heart of an 18-month-old political stalemate.

The two camps have already agreed that army chief Michel Suleiman should fill the presidency, vacant since November, and seem close to consensus on an electoral law for next year's parliamentary polls. Until now, deadlock has persisted over the opposition's demand for veto power in a national unity cabinet.

But pro-government Sunni, Druze and Christian leaders will probably have to give ground on this to their Shi'ite-Christian opponents after Hezbollah's display of muscle, Safa said.

"Hezbollah has been able to drive them into complete irrelevance. This government is a lame duck -- it makes decisions and cannot implement them," Safa said.

"They need a graceful exit, an agreement to save their face. Without that, they will be driven into a slow death."

Saudi-backed Sunni leader Saad al-Hariri and his allies, accused by Hezbollah of being U.S.-Israeli stooges, are likely to ask the Shi'ite group to re-commit to its now-broken promise to use its guns only against Israel, never against Lebanese.

UPPER HAND

Prime Minister Fouad Siniora's cabinet, which had enraged Hezbollah by outlawing its military telephone network and removing an airport security chief seen as close to the group, scrapped those decisions on Wednesday.

That met one demand of Hezbollah-led fighters who had seized Muslim parts of Beirut, routing pro-government Sunni and Druze gunmen, before returning overt control to the Lebanese army.