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    1. Home
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    3. >Analysis-War between Hezbollah and Israel deepens fractures in Lebanon
    Finance

    Analysis-War Between Hezbollah and Israel Deepens Fractures in Lebanon

    Published by Global Banking & Finance Review®

    Posted on March 27, 2026

    5 min read

    Last updated: March 27, 2026

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    Analysis-War between Hezbollah and Israel deepens fractures in Lebanon - Finance news and analysis from Global Banking & Finance Review
    Tags:FinancePoliticsLebanonWar Impact

    Quick Summary

    The escalating war between Israel and Hezbollah has displaced over one million Lebanese—predominantly Shi’ite—deepening sectarian tensions and straining Lebanon’s fragile political and social fabric. Threats of southern occupation, refusal to disarm Hezbollah, and mass internal movements exacerbate

    Table of Contents

    • Rising Tensions and Societal Impact in Lebanon
    • Escalation of Conflict and Political Faultlines
    • Displacement and Sectarian Tensions
    • Government Response and Hezbollah's Rhetoric
    • Humanitarian Crisis and Displacement
    • 'TICKING BOMB'
    • Israeli Military Actions and Security Concerns
    • Political Reactions and Fears of Sectarian Conflict
    • Israeli and Hezbollah Statements
    • Sectarian Logic and Local Responses
    • 'SECTARIAN LOGIC'
    • Community Clashes and Shelter Issues

    Hezbollah-Israel War Intensifies Lebanon’s Economic and Sectarian Strains

    Rising Tensions and Societal Impact in Lebanon

    By Tom Perry, Maya Gebeily, Laila Bassam and Emilie Madi

    Escalation of Conflict and Political Faultlines

    BEIRUT, March 27 (Reuters) - War between Israel and Hezbollah is pushing Lebanon's fragile state and society towards breaking point, straining sectarian and political faultlines as Shi'ite Muslims are displaced and enmity deepens between the Iran-backed group and its opponents.

    Of all Lebanon's many crises since a 1975-90 civil war, the renewed conflict ignited by the Iran war could be its most destabilising, Lebanese analysts and figures from across the political spectrum say.

    Israel has threatened Gaza-like destruction and an occupation of the south and there are acrid splits in Lebanon over Hezbollah's weapons, which the group has refused to give up despite a year-long effort by the state to disarm it peacefully.

    Displacement and Sectarian Tensions

    Israeli bombardment and orders for people to leave have driven Hezbollah's Shi'ite constituents into Christian, Druze and other areas, where many blame the group for starting a war in support of Tehran only 15 months after the last one.

    Local authorities are vetting displaced people seeking rented accommodation, fearing the presence of anyone who might be a target for Israel.

    Government Response and Hezbollah's Rhetoric

    Tensions between Hezbollah and the government are worsening. The administration led by Prime Minister Nawaf Salam and President Joseph Aoun has banned Hezbollah's military wing, called for talks with Israel and demanded Iran's ambassador leave.

    Hezbollah official Mahmoud Qmati has compared the government to the Vichy France leaders sentenced to death for collaborating with Nazi Germany in World War Two.

    "We are capable of turning the country upside down," he told a Lebanese media outlet although he later said his remarks were taken out of context.

    Druze lawmaker Wael Abu Faour says internal tensions are increasing because of political divisions over the war and displacement and "the defiant rhetoric from more than one side".

    "This exacerbates fears for internal stability," he said.

    Humanitarian Crisis and Displacement

    'TICKING BOMB'

    More than 1,000 people have been killed in Lebanon and over a million - more than a fifth of the population - have been displaced, most of them Shi'ite Muslims, since Hezbollah fired at Israel on March 2 and Israel hit back.

    A foreign official said the displacement was straining communal ties and would be "a ticking bomb" if the displaced cannot go home.

    Israeli Military Actions and Security Concerns

    Israel's military has ordered people to leave much of the south as well as Beirut's Hezbollah-controlled southern suburbs and the group's heartlands in eastern Lebanon.

    Israel's defence minister has said his country intends to create a "security zone" up to the Litani River, which meets the sea about 30 km (19 miles) north of the border with Israel. He has said hundreds of thousands of Shi'ites will not return south of the Litani until security is ensured for northern Israel.

    Political Reactions and Fears of Sectarian Conflict

    Nadim Gemayel, a Christian lawmaker opposed to Hezbollah, expressed concern that Israel was deliberately pushing Shi'ites into other parts of Lebanon to create conflict with other communities.

    Hezbollah has long been at odds with many other Lebanese factions, and has an arsenal more potent than the army's.

    During a brief civil war in 2008, when a Western-backed government tried to outlaw Hezbollah's communications network, Hezbollah fighters took over Beirut. The government backed down.

    Gemayel said tension "already exists, but the ignition hasn't happened yet, and I hope that it will never happen".

    "If the Israelis stay long, very long in the south, this will be catastrophic for everyone ... Lebanon cannot assimilate such a displacement of people," he said, urging the Lebanese government to "disarm Hezbollah and terminate this war".

    Israeli and Hezbollah Statements

    In response to a request for comment on the accusation Israel was seeking to stir sectarian tensions, an Israeli official did not directly address the question but said the only conflict in Lebanon was the one started by Hezbollah and urged the country to eject the group.

    The Israeli military said it was operating solely against Hezbollah, and that any allegations it was operating against a specific population were "false and misleading."

    However, an Israeli military official told Reuters that evacuation notices had been issued only to Shi'ite villages in Lebanon's south, and that Christian villages were still populated and not targeted by Israeli forces.

    Sectarian Logic and Local Responses

    'SECTARIAN LOGIC'

    Hezbollah lawmaker Hassan Fadlallah said some Lebanese were dealing with the issue of displacement "with sectarian logic".

    "We will overcome this phase because the displaced will return to their land and their homes as soon as the aggression ceases," he said.

    Community Clashes and Shelter Issues

    Underlining tensions, residents of a predominantly Christian area north of Beirut brawled with displaced people and demanded they leave on Tuesday when fragments of an Iranian ballistic missile intercepted over Lebanon fell onto the area.

    Moves to establish a shelter for displaced in Beirut's Karantina district, in a predominantly Christian area near the port, prompted objections by Christian politicians. Salam later decreed the site would instead be used to store aid.

    In the predominantly Christian neighbourhood of Dekwaneh east of Beirut, about 2,000 displaced Shi'ites are sheltering in a vocational college.

    Zeinab al-Meqdad, 50, said her family had encountered no problems in the neighbourhood since fleeing her home in the southern suburbs on March 2.

    Antoine Abu Aboud, a local official, said another 1,000 displaced were in hotels and rented accommodation in Dekwaneh.

    "There is a war, and the situation is bigger than us. Today, we Lebanese must be patient with one another," he said.

    He said the local council had tightened vetting of people seeking to rent, sending IDs to security fo

    Key Takeaways

    • •Over one million people—more than 15–20% of Lebanon’s population—have been displaced since Hezbollah’s March 2 attack and Israel’s retaliatory campaign, creating a severe humanitarian crisis. (apnews.com)
    • •Internal divisions are widening: Lebanon’s government has banned Hezbollah’s military wing and demanded Iran’s ambassador depart, while Hezbollah defies, likening the government to Vichy collaborators and warning it can “turn the country upside down.” (lemonde.fr)
    • •Israel’s creation of a ‘security zone’ up to the Litani River and destruction of bridges—including nearly all spans over the Litani—have isolated southern communities and heightened fears of long-term occupation. (apnews.com)

    References

    • In a southern Lebanese city emptied by Israel's offensive, some vow to stay put
    • Hezbollah defies the Lebanese state
    • Lebanese fear another occupation as Israel threatens to use Gaza tactics in the south

    Frequently Asked Questions about Analysis-War between Hezbollah and Israel deepens fractures in Lebanon

    1How has the Hezbollah-Israel conflict affected Lebanon's economy?

    The conflict has intensified Lebanon's financial crisis by displacing over a million people, straining communal ties and escalating instability.

    2Why are Shi’ite Muslims being displaced in Lebanon?

    Israeli bombardment and evacuation orders have forced many Shi’ite Muslims, Hezbollah’s main supporters, to flee to other parts of Lebanon.

    3What is the significance of the proposed 'security zone' north of Israel’s border?

    Israel’s plans could prevent Shi'ite populations from returning to southern Lebanon, raising fears of long-term displacement and increased sectarian conflict.

    4How are local authorities responding to the influx of displaced people?

    Local authorities are carefully vetting displaced persons seeking accommodation, fearing that targets for Israeli attacks could destabilize new communities.

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