By Alistair Lyon, Special Correspondent BEIRUT, July 8 (Reuters) - Fear that political deadlock may spill into violence is gripping Lebanon, a year after Israel and Shi'ite Hezbollah guerrillas jumped into a war that shattered trust between rival Lebanese camps. Assassins have slain two anti-Syrian politicians in the past eight months. More than 200 people have died in battles between Lebanese troops and al Qaeda-inspired militants in a Palestinian refugee camp. And a car bomber killed six U.N. peacekeepers in the south last month. Many Lebanese expect worse to come. With the Israeli-Hezbollah conflict far from over, they also fear their country could be sucked into any U.S.-Israeli confrontation with Iran or Syria, Hezbollah's main allies. Already many bright Lebanese youngsters have gone abroad to escape instability, despairing of politicians they see as less interested in forging a national consensus than in lining their pockets and relying on outside powers to gain advantage. "The Lebanese public is giving in to signs of fatalism about the risk of another civil war," Guiseppe Cassini, political adviser to Italian troops serving with the U.N. force in south Lebanon, told a conference at the European parliament last week. "The various factions are all re-arming," the veteran Italian diplomat said, referring to Christian, Druze and Sunni communities, as well as to Hezbollah, the only group formally permitted to keep its weapons after the 1975-90 civil war. NO APPETITE FOR CIVIL WAR No one in Lebanon relishes a return to full-scale conflict -- although Syria's opponents accuse Damascus of destabilising its neighbour to prevent it falling into Washington's orbit and to prove to the West its ability to play spoiler in the region. Hezbollah has sworn not to use its formidable arsenal against its internal foes -- fighting as a sectarian Lebanese militia would ruin its image in the Muslim world of heroic resistance to Israel and reflect badly on its Iranian sponsors. Other Lebanese leaders deny they are reviving militias, but say they fear security repercussions if the rift widens between factions aligned with or against the Western-backed government. Anti-Syrian Druze politician Walid Jumblatt says Lebanon is effectively split into two states, that led by Prime Minister Fouad Siniora, and a Hezbollah entity acting independently. "Our state is supported by the international community and international resolutions, the other one by the Iranian-Syrian axis," he told Reuters. "Lebanon is squeezed in the middle." Shi'ite and Christian opposition factions contend that the government lost its legitimacy when ministers representing them resigned from Siniora's cabinet in November. Backed by pro-Syrian President Emile Lahoud and Parliament Speaker Nabih Berri, they say all government decisions since then are invalid. The political paralysis is rooted in the mutual acrimony generated by last year's 34-day war that erupted after Hezbollah captured two Israeli soldiers in a cross-border raid on July 12. The Sunni-led pro-government alliance accused Hezbollah of plunging Lebanon into war to serve Syrian and Iranian interests. Hezbollah suspected Siniora and his allies of colluding with Israel and the United States in prolonging the conflict in hopes the Shi'ite guerrillas would be crushed and disarmed. "After that the hatred was just unbelievable," said a Beirut-based diplomat in frequent contact with all sides. "Both parties felt an existential threat from the other." SECTARIAN TENSIONS Rhetorical barbs that flew between Hezbollah chief Sayyed Hassan Nasrallah and pro-government politicians such as Jumblatt and Sunni leader Saad al-Hariri inflamed communal feelings. "The leaders are unintentionally exacerbating sectarian tensions," said Sami Baroudi, a Lebanese political scientist. "I don't think anybody wants to destroy the country. But they want the other side to make the concessions." If the two camps cannot agree on a national unity government or on choosing a new president later this year, the stage would be set for chronic instability and fragmentation of authority. In those circumstances, Hezbollah might turn away from domestic politics to focus on preparing for what it believes is an inevitable renewal of conflict with the Israelis. "They are going to war with Israel at some point anyway," said Amal Saad Ghorayeb, an analyst with the Carnegie Endowment for International Peace, predicting a regional conflagration. Lebanon's border with Israel has been relatively quiet since hostilities ended in August and an expanded UNIFIL force took over the area alongside 15,000 newly deployed Lebanese troops. Hezbollah has kept its arms out of sight in the UNIFIL zone, but security sources say it has fortified its positions just to the north and in the Bekaa Valley to the east, while replenishing its supply of rockets from Iran and Syria. Ghorayeb said Hezbollah had only held back from military operations, for example in the disputed Shebaa Farms border area, out of political concern for national unity. Hezbollah's Shi'ite supporters, frustrated by the government's survival and the U.S. support lavished on Siniora, had turned more radical than the leadership. "The popular base is much more hardline than Hezbollah," she added.
