The fight over foreign aid to Lebanon may be reaching a tipping point due to the formation of a new Lebanese government that is dominated by the terrorist organization Hezbollah and its allies.

Congress has gone back and forth over whether to keep sending cash and equipment to the Lebanese Armed Forces (LAF), particularly following a clash between the Israeli army and the LAF along the Israel-Lebanon border in August 2010 that left five people dead. Now Howard Berman (D-CA), the top Democrat on the House Foreign Affairs Committee, is pushing a bill to end almost all U.S. assistance to Lebanon. He's joined by the top Lebanese-Americans in Congress, including Darrell Issa (R-CA), Charles Boustany (R-LA), and Nick Rahall (D-WV). 

His bill, the Hezbollah Anti-Terrorism Act (HATA), is modeled on Palestinian Anti-Terrorism Act (PATA) that Congress passed after Hamas won the 2006 elections to the Palestinian Legislative Council.

"When there is essentially a government in Lebanon where a militia organization that has a political front and that is on our terrorist list is determining the nature of that government, the fundamental nature of Lebanon changes very much, from an election-based democracy into a different kind of country," Berman said in a Friday afternoon interview with The Cable.

"Under those situations, with limited exceptions, I don't think American taxpayers should be providing military or economic assistance to help Hezbollah maintain its grip on the government of Lebanon," he added.

Berman had put a hold on assistance to Lebanon last summer, but later allowed the money to go through because he wanted to strengthen the LAF in its internal struggle against Hezbollah. But now the situation is totally different and he won't back off, he said.

"The notion that the LAF will remain an island of independence under a government that is dominated and welded together by Hezbollah is a very different proposition," he said.

Berman's bill would still allow support for rule of law and democracy programs, educational funding, and even training of Lebanese forces in America under the IMET program. The president would also be able to waive restrictions in the law in cases that were deemed to be in the national security interests of the U.S.

His GOP counterpart, HFAC chairman Ileana Ros-Lehtinen (R-FL) is generally supportive of the idea and is considering supporting the bill, Berman said.

But what about the notion that Iran will be more than happy to make up any deficit caused by the withdrawal of U.S. aid?

"Iran has been supplying Hezbollah for years. This is not a fear, this is a reality. We have to respond to this reality and I think this is the way to do it," Berman said.

He released a summary of the legislation, which could come up as a free-standing bill or as an amendment to a larger piece of legislation.

The Obama administration has made it clear to the Lebanese government that it should do everything in its power to avoid another border skirmish with Israel and be careful about cozying up to Iran if they value their defense relationship with the United States.

Iran has offered to become the primary supporter of the Lebanese Armed Forces (LAF) after two leading U.S. lawmakers put a hold on U.S. military assistance to the LAF last week. The holds were placed around the same time as a border skirmish between Israel and Lebanon that resulted in four deaths. The attack on Israeli soldiers who were pruning a tree began with shots fired from the Lebanese side, possibly with an American made sniper rifle.The lawmakers, House Foreign Affairs chairman Howard Berman, D-CA, and House Appropriations Foreign Operations subcommittee chairwoman Nita Lowey, D-NY, are working with the administration now and the expectation is that the holds will be soon lifted.

But in the meantime, the administration delivered a message to the Lebanese government via Frederic Hof, senior advisor to Special Envoy George Mitchell, who was in Beirut on a previously scheduled visit. Hof arrived there last week and left August 9. He met with senior civilian and military leaders to discuss the border incident and to update them on the Israeli-Palestinian peace process, a senior U.S. official told The Cable.

"He noted that the incident could and should have been avoided and placed stress on the important U.S.-Lebanon bilateral defense relationship," the official said.

Hof also warned that some in Congress were trying to curtail or even eliminate U.S. military assistance to the LAF and the administration's efforts to keep the assistance going were dependent on there being no further incidents.

"Hof told his interlocutors that if something like this were to happen again, he's not sure we could prevent [the elimination of the aid] from happening," the official said.

Perhaps most importantly, Hof communicated to senior Lebanese officials that their actions going forward, such as taking assistance from Iran, for example, would have consequences for U.S.-Lebanon military cooperation.

"He reaffirmed that the Administration considers the relationship very important and the role of the LAF as a national institution defending the country's sovereignty to be vital. But he also explained that our ability to justify and strengthen this important defense relationship will be affected by what Lebanon does in the wake of this incident," the official said.

Reports from the region said that Hof met with Lebanese Army commander Gen. Jean Qahwaji, who also met with Iranian ambassador to Lebanon Ghazanfar Abadi on Monday.

It's not clear that the Lebanese government or the LAF got the message. Lebanese Defense Minister Elias al-Murr shot back at Congress defiantly on August 11.

"That person who said in Congress, 'I will stop aid to the army,' he is free to do so.... Anyone who wants to help the army without restrictions or conditions, is welcome," Murr said. "This person wants to make military aid conditional on not protecting [Lebanon's] land, people, and borders against Israeli aggression. Let them keep their money or give it to Israel. We will confront [Israel] with the capabilities we own."

Murr also reportedly said the army fired at Israel based on "an order from the army chief."

Back in Washington, the State Department is working with Berman and Lowey to reassure them that U.S. military aid is not going to Hizbollah and is not being used against U.S. allies. A State Department official said on background that he expects the holds to be lifted soon.

"We are committed to our relationship with Lebanon," State Department spokesman P.J. Crowley said Wednesday. "It serves our interests; it serves Lebanon's interests; it serves the region's interests. We continue to believe that investing in Lebanon's government and investing in Lebanon's military serves as a stabilizing influence and expands and strengthens Lebanon's sovereignty."

The actual money, $100 million worth of Humvees, small arms, and maintenance support, was already appropriated by Congress as part of the fiscal 2010 appropriations bill. But as of July 29, the money was still unspent. That's the day State sent over what's known as a "spend plan" for the money, which is what triggered the holds from Berman and Lowey.

Berman actually placed his hold before the border clash. Lowey placed her hold in reaction to the incident.

"Before disbursing this assistance, we must understand the exact circumstances of the incident and how our assistance can most effectively enhance our security and that of our allies," Lowey told The Cable Wednesday. "I am working closely with the Administration to answer these questions."

Two more lawmakers have also waded into the debate. House Armed Services Committee chairman Ike Skelton, D-MO, wrote to Defense Secretary Robert Gates to ask for briefings on U.S. military assistance to the LAF.

"I have supported both this and the last Administration's efforts to build the capacity of the Lebanese Armed Forces (LAF) to conduct counterterrorism operations. However, this recent exchange of fire between Israeli and Lebanese armed forces along that border has me concerned that our policy with Lebanon may be counter-productive," Skelton wrote.

And House Minority Leader Eric Cantor, R-VA, called for fiscal 2011 funding to be blocked until the questions regarding the incident and the LAF's relationship to Hizbollah are resolved.

"The LAF's unprovoked attack on the Israeli defense forces in undisputed Israeli territory demands a sweeping reassessment of how we distribute our foreign aid," Cantor said in a statement.

Cantor apparently didn't realize that fiscal 2011 funding has not been considered by Congress and won't come up for several months.

Maura Connelly, the president's nominee for ambassador to Lebanon, has taken a long journey in her career as a Foreign Service officer. Her tours have included Algeria, Damascus, Jerusalem, Jordan, London, South Africa, and Washington, where she now serves as deputy assistant secretary in the Near Eastern Affairs bureau.

In her confirmation hearing Tuesday, we learned that her career in government service began when she was a Senate page during high school and then when she worked as an elevator operator in the Capitol building when she was an undergrad at Georgetown.

But Sen. Robert Menendez, D-NJ, highlighted her childhood experience in the rough and tumble northern New Jersey suburbs as another asset she can bring to bear when she gets to Beirut.

"Anyone who was born in Jersey City, New Jersey, could probably do very well in Lebanon," Menendez said.

As Lebanese Prime Minister Saad Hariri makes the rounds in Washington today and tomorrow, he faces deep questions in Congress and in the Defense Department about the future of the U.S. military aid to the Lebanese Armed Forces.

Supporters of the funding, mostly at the State Department and the White House, argue that strengthening the Lebanese military is the best way to bolster Hariri against the mounting influence of both Syria and Hezbollah, the radical Shiite militant group, inside Lebanon. The Lebanese military, this faction argues, is the most representative of the country's civic institutions and continuing the funding can help convince Hariri that working with the U.S. is a beneficial and defensible strategy.

But many lawmakers and some at the Pentagon, including Secretary of Defense Robert Gates, are extremely skeptical that continuing to funnel large amounts of cash and supplies to the LAF is really a good way to approach the Lebanon problem. They are angry about statements Hariri has made about Syria's alleged transfer of long-range missiles to Hezbollah, and question whether the military aid to Lebanon is part of a coherent strategy.

"Threats that Lebanon now has huge missiles are similar to what they used to say about weapons of mass destruction in Iraq," Hariri reportedly said last month. "These are weapons that they did not find and they are still searching for."

But Hariri's reaction to the alleged arms transfers has given many inside the administration pause. There's also a concern he could let U.S. weapons slip into the hands of Hezbollah, although the track record of the LAF in that regard has been solid so far.

"The number one issue now is arms transfers from Syria to Hezbollah and this confounds our policy of supporting the Lebanese military," said Andrew Tabler, a fellow at the Washington Institute for Near East Policy. The Obama administration wants Hariri to use the state's instruments of power, such as the LAF, to confront Syria over the alleged arms transfers, but Hariri is in no position to confront Damascus.

Hariri has been careful not to upset Syrian President Bashar al-Assad, who is widely thought to have ordered the 2005 assassination of his father, former prime minister Rafiq al-Hariri.

"It would be hard for anyone not to take note that he visited Damascus before he visited Washington," said long-time Lebanon hand Firas Maksad, who said that Hariri is walking a very thin line as he tries to placate the United States and Syria at the same time.

Overall, the arms transfers are on balance a good idea, said Maksad. "We need to think about how we can strengthen our leverage in Beirut. At the end of the day, that's the only hope for a counterbalance to Hezbollah."

But lawmakers, always looking to pinch pennies, and Pentagon officials, who are most concerned about the Hezbollah-Israel tensions, aren't satisfied that strategic hedging is enough of a justification for continued military assistance like on the order of $500 million since 2006.

"The Defense Department has always asked the question: Why are we doing this, what are the objectives, what is the end state we are trying to achieve in Lebanon?," said Aram Nerguizian, visiting fellow at the Center for Strategic and International Studies. "It's an idea that is not linked to an end state. We like the process, but ultimately, what is it that the U.S. is trying to do in Lebanon? That's what hangs in the balance."

Mona Yacoubian , who just released a new report on the Syria-Lebanon situation for the U.S. Institute of Peace, said that there is growing concern inside the administration that the shift of power inside Lebanon toward Hezbollah suggests that it may not be wise to put more resources into the Lebanese military. She argues, however, that the best way to deal with Hezbollah is to help build and strengthen the Lebanese state.

Meanwhile, Hariri is faced to deal with the facts on the ground, which are clearly tipping toward a negative direction, she said.

"He's coming to Washington with a very difficult task. He's got to balance day-to-day concerns with the broader concerns of his ally, the U.S. If he moves to please us, he angers Syria, Hezbollah, and others. If he seems to mimic the U.S. position, he suffers at home. He's in a no-win situation."

The White House readout of Hariri's meeting with President Obama gave little inkling of these tensions, and said the meeting focused on Arab-Israel peace effort, the suspected transfer of Syrian weapons to Hezbollah, and Lebanon's role as rotating president of the U.N. Security Council, which is currently mulling over new sanctions against Iran. But the statement also pointed to President Obama's "determination to continue U.S. efforts to support and strengthen Lebanese institutions such as the Lebanese Armed Forces and the Internal Security Forces."

Privately, the White House was sending a much tougher message, however. Hariri brought so many officials into his bilateral with Obama, sources say, there was no way to speak frankly about subjects of real contention, like U.S. military support and Hariri's unhelpful statements regarding the alleged Hezbollah arms transfers. So Obama and Hariri had a separate, private meeting amongst themselves, where we hear the tough messages were really delivered.

Hariri also met with Gates, Assistant Secretary of State Jeffrey Feltman, and Middle East Special Envoy George Mitchell today. Feltman, who was the U.S. ambassador in Beirut at the time of Rafiq al-Hariri's assassination, released a statement citing Lebanon's role in promoting international security and "the key role of Lebanon in the long-term effort to build a lasting, comprehensive peace in the Middle East."

But Feltman didn't mention Lebanese military assistance, which will be at the top of lawmakers' agendas Tuesday.

"His meetings went very well today," David Schenker, director of the Arab politics program at the Washington Institute for Near East Policy, said of Hariri. "I don't think that's going to be the case when he goes to Capitol Hill tomorrow."

The administration has requested $100 million for the LAF in its Fiscal 2011 budget request.

When U.S. Ambassador to Lebanon Michele Sison met with Lebanese officials on Wednesday, she had a mission: She was there to urge Lebanon to help avoid a new outbreak of violence between Israel and the Shiite militant group Hezbollah.

Sison, an affable and well-liked career Foreign Service officer, was given the difficult task of both urging the Lebanese to do what they can to avoid an eruption of war and convincing them that U.S. and Israeli concerns about alleged Syrian arms transfers over the Lebanese border should be taken seriously.

Arab press reports cited anonymous sources as saying Sison showed Lebanese Speaker of Parliament Nabih Berri and Prime Minister Saad al-Hariri photos of truck convoys, evidence of increasing and escalation weapons shipments to Hezbollah. More shockingly, the reports said that she told Lebanese officials the United States had stopped Israel from launching an imminent strike against the convoys. Neither of those details is true, according to multiple administration sources.

State Department spokesman P.J. Crowley told The Cable that the idea American waived Israel off of a strike on Syrian weapons transfers is "totally false," but declined to describe the specifics of the meeting. Another U.S. official described the Arab press reports as "bullshit."

Two administration officials close to the issue, however, said that the meeting did in fact take place, but no photos were shown and the United States did not halt an imminent Israeli strike.

"The Israelis weren't ready to shoot anything. There was never a point where they said, ‘We are going to strike something,'" the official said, adding that at some point Israeli action could of course be a possibility -- albeit a disastrous one.

Regardless, the controversy surrounding Sison's meeting reflects the extremely high tensions in the region following reports of new Syrian weapons transfers, including possibly SCUD missiles, to Hezbollah -- tensions the Obama administration is trying to tamp down.

Sison's message was the same message the U.S. is sending to all the parties, which is, "A war now is not in anyone's interest," the official said.

The administration is still not clear that any SCUDs have been transferred, but there is an acknowledgement that Syrian weapons transfers are increasing in both quantity and quality.

"It's a deterrence game and each side is building up its deterrence capability," this official said, adding that as both the Israelis and Hezbollah prepare for war, the seriousness of any actual outbreak of fighting is keeping both sides from initiating battle -- for now.

"In a way, the deterrence is working," the source added, noting that the downside risk of the arms buildup is that any miscalculation that begins an open conflict would precipitate a large-scale war that whose consequences would be impossible to predict.

According to this official, who stressed that they were only conveying their personal analysis, not the overall administration position, Hezbollah is still seeking revenge for the 2008 Israeli assassination of its military leader Imad Mughniyeh, and sees some spectacular attack on Israel as a way to achieve that.

But Hezbollah, now accountable to the Lebanese people due to its role in the government, doesn't want to be seen as firing the first shot that could lead to devastating retaliation from Israel. So the group is trying to goad the Israelis into starting the conflict, the official believes.

The Israelis are aware they are being goaded, the official said, and are doing their best to resist while warning Washington that at some point violence might be unavoidable. "The Israelis know that once they strike, that's all the excuse that Hezbollah needs to wage a full-scale war," the official explained.

As for why Syria seems to be playing such an unhelpful role, "that's the million-dollar question," the official said. The Obama administration genuinely does not understand Syrian intentions and there are three basic theories within the administration as to why Syrian President Bashar al-Assad would continue to escalate arms shipments to Hezbollah despite U.S. warnings.

According to one school of thought, this is Assad's way of playing hardball with the Israelis in advance of Israeli-Syrian negotiations. No one wants to negotiate from a weak position, so he is amassing chits that he can bargain away later.

An opposing theory is that Assad has no interest in engaging with the Americans or negotiating with Israel at all. This line of thinking concludes that he is simply paving the way for eventual conflict with Israel.

The third, more nuanced analysis portrays Assad as a man in a bind. He has himself so tied up with Iran and Hezbollah that perhaps he can't disengage as easily as those in the West think he can. Also, Assad has always been a gambler and may have simply become entangled in his own web of deals with so many competing interests.

"We do not understand Syrian intentions. No one does, and until we get to that question we can never get to the root of the problem," the official said. "Until then it's all damage control."

Meanwhile, the administration is trying to explain to the Syrians how foolish the weapons transfers are, if they are really happening, while telling the Israelis to be patient and arguing that the only beneficiary of a new Israeli-Hezbollah war would be Iran, which would seize upon a new conflict to deflect international pressure over its nuclear program.

And what about Hariri, who said the SCUD allegations were "reminiscent of the weapons of mass destruction allegations against Saddam Hussein" and "a pretext for threatening my country"?

"Hariri is terrified that another war is going to break his country apart and if that means denying the weapons transfers or whatever, he's going to do it," our official speculated. "He's desperately trying to save his country from utter decimation."