COLUMN ONE : Tiny Land Still Caught in Middle : Long a flash point of Mideast conflict, Lebanon fears new woes as old foes negotiate. The nation ‘paid for other people’s wars,’ a Beiruti sighs. ‘Must it pay for other people’s peace?’

In this sun-splashed village, where slow-footed donkeys and a klatch of men sipping tea in front of the grocery store animate a somnolent autumn afternoon, there is little to suggest that this is the heart of a tedious, deadly war against Israel.

But look again. On the wall at the local school are pictures not of the Lebanese president, but of the Ayatollah Ruhollah Khomeini, Iran’s late supreme leader. A discreet poster near the entrance to town, on close inspection, shows a raised fist clenching a machine gun--the trademark of Hezbollah (Party of God), the militant Shiite Muslim group that has taught the world the meaning of Islamic revenge.

And the clinking of hammers on stone along the upper reaches of this hillside hamlet calls attention to many new or half-built homes. Hard at work are crews from Jihad Construction Co., which already has rebuilt 1,200 houses destroyed or damaged in July by Israeli artillery and warplanes when they zeroed in on this village, rife with Hezbollah guerrillas.

“The greatest defeat that Israel has faced from 1948 to the present is the Islamic resistance in the south of Lebanon,” said Amar Abul Hassan, Hezbollah’s spokesman in Jibchit. “They can kill us, massacre us, destroy our houses, kill our women and children, slaughter our elderly people. But there remains one thing in us, and that is the resistance.”

As Palestinian and Israeli negotiators work out details of a peace agreement in the West Bank and Gaza Strip, a forgotten war remains a flash point in the 45-year Arab-Israeli conflict. It plays out day by day in the tortured villages that form the frontier between Lebanon and Israel’s self-declared security zone.

As Israeli negotiators meet Saudis and Moroccans to haggle over economic relations, as Palestinians bicker over details of self-rule in Jericho and Gaza, as Damascus and Tehran threaten and flirt with Tel Aviv, their wars these days are fought, as they have been for years, at a distance, in the olive groves and tomato fields of Lebanon.

The heaviest clashes since the Sept. 13 signing of the Palestinian-Israeli accord broke out last month in southern Lebanon when Hezbollah guerrillas fired Katyusha rockets and stormed into the security zone, capturing 12 soldiers from the Israeli-backed South Lebanon Army.

Israel retaliated with an artillery barrage on 10 Shiite Muslim villages, its helicopter gunships and warplanes hitting Hezbollah targets in southern Lebanon and the Bekaa Valley.

The clashes, the worst in what has become an almost daily tit-for-tat shelling skirmish on the frontier, were uneasy reminders of Israel’s punishing seven-day assault on southern Lebanon in late July. That operation, dubbed Operation Accountability, was designed to halt Lebanese attacks on Israeli targets in the security zone and northern Israel.

The aerial and artillery assault killed more than 100 civilians, destroyed more than 900 homes and damaged 4,000 others in 70 villages throughout southern Lebanon. About 300,000 residents fled their homes.

Lebanon, which seeks hundreds of millions of dollars in foreign aid to help repair the damage, is bearing the brunt of the Arab-Israeli conflict, even as it faces the disastrous consequences of 15 years of a civil war whose repair bill now totals about $20 billion.

In recent months, as neighboring Syria drags its feet on signing a peace agreement with Israel, American officials have quietly tried to persuade Lebanon to move quickly to the bargaining table and end the war that no one appears able, or even especially inclined, to win.

In advance of Prime Minister Rafik Hariri’s recent visit to the United States, newspapers here were full of a “Lebanon First” option, purportedly suggested by the Americans. Under this plan, Lebanon would comply with a longstanding American and Israeli demand to disarm Hezbollah and move in the Lebanese army to control the south.

In exchange, Israel would withdraw from the security zone that now includes 10% of Lebanon’s territory and, under one version of the proposal circulated here, South Lebanon Army members would be integrated into the Lebanese army or allowed to settle in Israel.

But Lebanon appears to have said no to an early peace. And the reasons have much to do with Lebanon’s intricate political and economic links to the rest of the Middle East and its role as a barometer of conflict in the region.

“There are some voices in Lebanon who say, ‘If we can make progress, let’s do it,’ ” said Beirut political analyst Tawfik Mishlawi. “We don’t need to move side by side with the Syrians. But there are no Lebanese who say, ‘Let’s have a separate peace treaty.’ ”

The simple answer is that Syria, whose 40,000 troops stationed here dictate that Lebanese policy is made in Damascus, is not ready for peace with Israel. And Syria has a substantial interest in seeing groups--like Hezbollah, Islamic Jihad and radical Palestinian organizations--keep up the pressure against Israel on the Lebanese border, even as Damascus’ delegates are talking peace in negotiations in Washington.

But for its own reasons, Lebanon itself remains skeptical about any early peace with Israel. Peace raises a host of troubling problems to which a nation still trying to undo the damage of a civil war may not be ready to respond.

How, for example, would Lebanon integrate about 75,000 civilians who have been living under Israeli domination in the security zone for more than a decade? And what would Lebanon do with the South Lebanon Army?

Equally troubling is a widespread sentiment in Beirut that the low-grade conflict in the south may be better than the kind of peace it would bring.

A full-scale Arab-Israeli peace, many here fear, would have more devastating economic consequences for Lebanon than for any Arab country because it would shut Beirut out of its traditional role as deal-maker and middleman and open the door for Israeli economic domination of the region after years of military dominion.

Economic openness with Israel would be “more dangerous than war,” predicted one Beirut banker. Such feelings are only heightened by a sense of unfairness; while Lebanon has received pledges of $1.3 billion in foreign aid to repair 15 years of civil war--most of it loans--the Palestinians, whom the Lebanese largely blame for their war, already have promises of $2.5 billion.

The government also is butting heads with Washington over U.S. refusal to lift the ban on citizens traveling to Lebanon. The ban has helped to foster the global business community’s devastating reluctance to make badly needed investments here.

But Washington’s demand that Hezbollah be disarmed before the ban can be lifted raises wider questions about longer-term regional alliances throughout the Middle East, as Syria, Iran and even Turkey contemplate a strategic future that still seems inexorably bound to a tiny land called Lebanon.

“Lebanon has paid for other people’s wars,” a Beirut columnist complained recently. “Must it now pay for other people’s peace?”

Hariri, the billionaire businessman-turned-prime minister whose close links to the Saudi royal family have only partially helped attract Gulf Arab investment for rebuilding, has walked a fine line--between convincing the United States he is serious about peace and the Syrians he is not leading Lebanon too far astray.

The conflict came to a head after the July assault, when an infuriated Hariri ordered the Lebanese army deployed around Tyre in south Lebanon. He found himself faced with a doubting Cabinet and an army uncertain whether it had a mandate to take on Hezbollah, or whether it even wanted one, given the Lebanese public’s overwhelming support for the guerrilla effort against Israel.

It was a daring political gamble, and it backfired, in part because of the quagmire that is Lebanese politics.

President Elias Hrawi, a Maronite Christian as required under the constitution and no particular friend to either Hezbollah or Syria, reportedly pronounced Hariri’s military deployment “an excellent idea,” then telephoned Damascus and asked if they knew what the prime minister was up to.

Damascus, according to opposition sources who relayed the tale, did not. The Syrians had been approached by Hariri in an off-handed way about sending the army into the south but had been caught off-guard by his speedy move.

Hariri, Hrawi and Parliament Speaker Nabih Berri were ordered to Damascus, and, according to one opposition source, “The Syrians gave them hell. I am ashamed to tell you the words, the terminology, they used with them. Then the Syrians deliberately put out the word about how they had treated them, and until today, the credibility of Rafik Hariri with (Syrian President) Hafez Assad has not been reconstructed.”

In the end, only a few hundred troops were deployed; Hezbollah was left to conduct its operations unimpeded in the south. And the Lebanese government received another lesson in who calls the shots in Beirut.

“We cannot go to peace without Syria. We will have another civil war on our hands. And we have seen what civil war means,” one government official said in an interview. “If Israel signed a separate peace with Lebanon, the next day they would want to know why Syria was still maintaining control of important strategic locations in the south of Lebanon and the Bekaa. We would be forced to try to do something about it--and then we would have another war on our hands.”

“I fully agree with those who say, ‘Forget about Lebanon. Lebanon will do whatever Syria wants,’ ” said Elias Saba, a former Parliament deputy and finance minister who now is active in the Christian opposition. “Pragmatically, realistically, don’t expect a Lebanon (which) is an independent party in the bilateral negotiations with Israel.”

Ironically, the Lebanese Christians who have spent years loathing Hezbollah and everything it represents occasionally have become its defenders in recent months. As the Christian opposition has fallen apart--factional divisions and a boycott of the national elections left them with little real strength--they have looked to Hezbollah as a potent force to oppose the Hariri government, which they see as toothless against the Syrians, and the Israeli occupation.

“I’m anti-Hezbollah, but in the present situation, I say, ‘My God, without Hezbollah, this country would have no semblance of an opposition.’ It would be a one-man company,” Saba said. “Hezbollah is the only serious other opinion. This is the dilemma in which people like us find ourselves. You hate to condone Hezbollah, and yet, without Hezbollah today we are much worse off. So what do you do?”

In an auditorium on the outskirts of Beirut, hundreds of Hezbollah faithful gathered in early November to celebrate Martyrs’ Day, this year dedicated to the nine people who died in south Beirut on Sept. 14 when the Lebanese army fired on Hezbollah demonstrators protesting the Palestinian-Israeli accord.

The sounds of chanting echoed off walls decorated with posters of the Lebanese suicide bomber who in 1983 attacked the U.S. Embassy, known here as the “nest of spies”--”God is great! War until victory! We will march to Jerusalem!” The eerie wailing of Shiite Muslim funeral dirges filled the silence as the shouting subsided.

Sheik Mohammed Hussein Fadlallah, Hezbollah’s spiritual leader, said Hariri ordered the army to fire on demonstrators to show the American government he could control the organization, the only one of Lebanon’s many militias that has yet to be disarmed.

“We think that this massacre was a political card that the Lebanese government has presented to the U.S. and Israel in order to prove that the government is able to face the opposition,” Fadlallah said in an interview.

But he said Hezbollah, which some sources say has received $30 million in new funding from Iran since the July assault, is determined to continue the fight against Israel.

“I think the whole world would give the right for those in occupied lands to defend themselves and repel the usurpers,” he said.

“The mere fact of having settlements, without even shooting one bullet, is an aggression against the Palestinian people. We do not like to kill people, but we state to all those who have committed aggressions against our land, ‘Get out of our land, so that we can live together in peace.’ ”

In southern Lebanon, however, plenty of people are ready for peace. In Nabatiyeh, the southern marketing town hit in July and again in mid-November, a growing number of people are angry with the Israelis for attacking them and angry with Hezbollah for provoking the Israelis.

“We send our children to school, then we sit at home and wait: Are they going to bomb today or not?” said Randa, whose house was destroyed in July on the night the Israelis attacked with artillery shells and phosphorous bombs.

“We can’t accept the idea that everybody else is going to have peace, and we’re going to go on with this state of war, this continual fear. What we say is, let them find a solution between each other, so this will end.”

Mouin Jaber, Nabatiyeh’s mayor, sat in the lobby of his apartment building and recited the litany of battle in Lebanon without expression in his voice. “If you had been here an hour ago, you would have heard the shelling again in the neighboring villages,” he said. “It’s part of the daily routine. It’s like eating bread. . . .

“You see, it is because the Israelis have invaded the security zone in the south, and we’ve got a resistance,” Jaber explained.

“The resistance is fighting them, and so they’re responding by shelling the citizens.”

He said no more on the subject. It was as if this recitation of cause and effect, provocation and consequence, rebuilding and new death, needs no explanation beyond that.

Lebanon: Middle East Flash Point

Homeland of the ancient Phoenicians, Lebanon has been riven by civil and sectarian strife even before it won full autonomy as a nation in 1944. Here are some key dates in the troubled nation’s past:

1958: Civil war breaks out, when Muslim factions rise up against government headed by a Maronite Christian; U.S. interceds to help restore order.

1975: Another bloodier civil war commences with factional violence claiming an estimated 40,000 lives and injuring 100,000 between March, 1975 and November, 1976. A Syrian-led force intervenes, halting large-scale warfare.

Early ‘80s: Israel twice in recent decades goes in to try to halt Palestinian raids, staged from Lebanese territory. On June 6, 1982, Israel conducts a total invasion, in reprisal for Palestinian terrorists’ attempted assassination of an Israeli diplomat in London.

1982: With U.S. intervention, forces of Palestinian Liberation Organization are dispersed and Israel partially withdraws.

September, 1982: Assassination of Lebanese President-elect Bashir Gemayel. Israel moves its troops in full force into west Beirut after Gemayel’s killing. Later, it is revealed that Christian militiamen have massacred hundreds of Palestinians in refugee camps; Israel denies having any responsibility in the incident.

1983: A multi-national peacekeeping force (including Americans) returns with mandate to support central Lebanese government. But the force soon gets caught between Lebanese factions; 264 American servicemen and 60 French soldiers are killed, most in an Oct. 23, 1983, suicide bombing of a U.S. Marine compound. The multi-national force departs in spring, 1984.

1984: Israeli troops are stationed in southern Lebanon; Syrian troops stay in Bekka Valley; by mid-1985, Israeli forces largely withdrawn.

Mid-1986: Syrian forces are in Beirut monitoring a peacekeeping pact, which quickly breaks down. Fighting between Shiite and Druze militias intensifies so much that Syrians are forced to step in by early 1987.

Late 1988: Amin Gemayel’s presidency expires, and with elections impossible, he designates a government led by Gen. Michael Aoun; Prime Minister Selim Hoss rejects this and starts own rival government.

Late 1989: Christian and Muslim legislators approve a tentative peace accord and elect a president; Aoun, saying the accord insufficiently compels Syrians to withdraw, refuses to recognize new Lebabnese government.

1990-91: With Syrian backing, Lebanese government attempts to regain control of south and to crush all militias. It ends up clashing with PLO guerrillas; Israel refuses to withdraw from the south.

1992: After strikes and discord over the nation’s dire economic condition and allegations of government corruption President Elias Hrawi invited Prime Minister Rafik Hrawi to form a new government.

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Breakdown by religion:

Muslim: 57%

Christian: 43%

Muslims are made up of Sunni, Shiite and Druze. Christians include Roman Catholics, Armenian, Greek and Syrian sects, both Catholic and Eastern Orthodox; and Protestants.