By Nadim Ladki BEIRUT, Feb 5 (Reuters) - Arab diplomats will hold talks in Beirut and abroad this week to try to defuse Lebanon's political crisis before it deteriorates again into civil strife, diplomats and Lebanese political sources said on Monday. A compromise to resolve the standoff between the government, backed by Saudi Arabia, France and the United States, and the Hezbollah-led opposition, has proved elusive. But talks between senior Iranian and Saudi officials have helped to keep the peace in Beirut after deadly clashes on Jan. 23 and 25 in which eight people were killed and 400 wounded. "There has been little progress towards a deal," a Lebanese political source said. "But at least the diplomatic activity helped calm the situation before it got out of hand." The source said Saudi and Iranian influence with their respective allies in Lebanon had gone some way towards dampening street tensions that have run high since the opposition set up a protest tent city in central Beirut nearly 10 weeks ago. The political logjam has threatened to spill into sectarian violence. Shi'ite Muslim factions spearhead the opposition while Sunni Muslim leaders back the government. The fate of $7.6 billion of badly needed aid and soft loans pledged to Lebanon at a conference in Paris last month also hangs in the balance. Over the past two weeks, senior Saudi diplomat Prince Bandar bin Sultan has visited Tehran, Washington, Moscow and Paris for talks on the Lebanese crisis and other regional issues. Iran and Syria, Hezbollah's backers, have also been in constant contact. Arab League Secretary-General Amr Moussa visits Russia this week and is sending an aide to Beirut to prepare for another round of mediation between rival Lebanese leaders. A similar effort by Moussa in December failed. The Lebanese opposition wants veto power in government and early general elections. Prime Minister Fouad Siniora and his anti-Syrian majority coalition have refused to give in, accusing Hezbollah of trying to reinstate Syria's hegemony over Lebanon. PACKAGE DEAL Other contentious issues include the election of a new president and formation of a U.N.-backed international tribunal to try suspects in the 2005 assassination of former Prime Minister Rafik al-Hariri and other political attacks. Sources close to the opposition say a formula discussed by Iran and Saudi officials calls for a national unity government, formation of the Hariri tribunal after a U.N. inquiry completes its investigation, and the election of a new president by parliament, followed by early parliamentary elections. But the sources said moves to link any deal on Lebanon to wider U.S.-Iranian disputes over Iraq and Tehran's nuclear programme have frozen progress. Another dampening factor has been Saudi Arabia's chilly relations with Syria. Diplomats say Bandar's visit to Moscow was partly to ask Russia to persuade Syria to cooperate more on the tribunal. Anti-Syrian Lebanese officials who have visited Moscow in recent weeks say Syria's allies are blocking formation of the court on Damascus's behalf. The U.N. investigation has implicated Syrian security officials in Hariri's killing. Damascus denies any involvement. The Arab League's Moussa is also trying to mend fences between Riyadh and Damascus. He is expected to visit both capitals before or immediately after he comes to Beirut. Syria was the dominant force in Lebanon for three decades until an international and Lebanese outcry over Hariri's killing forced it to withdraw troops from its neighbour in April 2005.
