Lebanons

BEIRUT, Lebanon, Aug. 21 (UPI) — The World Bank said Friday that the recent Israel-Hezbollah conflict has severely disrupted Lebanon’s fragile recovery, predicting a 6.4% contraction in the crisis-ridden economy this year and a rise in inflation to 17.5%.

The international financial institution said in a report that Lebanon entered 2026 “on firmer footing,” after an estimated 4.2% expansion in real gross domestic product in 2025.

It was the country’s fastest growth since the onset of the 2019 financial crisis, driven by stronger consumption, investment and tourism, as well as improved high-frequency indicators, according to the report.

It noted that the rebound was sharply interrupted by the military escalation between Hezbollah and Israel on March 2, causing further damage to housing and infrastructure, displacing some 1.2 million people, disrupting supply chains, and severely affecting tourism and domestic demand.

Dahlia Khalifa, World Bank Middle East director, said Lebanon’s recovery has been “sharply set back by the renewed conflict,” adding to an already severe social and economic crisis.

The report projects that Lebanon’s economy will contract by 6.4% in 2026, while inflation is expected to rise to 17.5%, driven by supply disruptions, higher shipping costs and rising oil prices, further eroding purchasing power.

According to the latest casualty count released by the Lebanese Health Ministry, some 4,348 people have been killed and 12,703 others injured since March 2. Israel’s intensive military campaign has caused massive destruction to property and infrastructure, with some 70 border villages in southern Lebanon reduced to rubble and rendered uninhabitable.

Lebanese Finance Minister Yassine Jaber has estimated that the combined direct and indirect losses resulting from the conflict in Lebanon since 2023, including the 2024 and 2026 escalations, could reach $20 billion.

Lebanon was still struggling to recover from a protracted financial crisis — described by the World Bank as a “deliberate depression” and the worst globally since 1850 that limited access to bank deposits, caused prices to soar, unemployment to soar and public services to deteriorate.

Moreover, the population faced eroded purchasing power after the Lebanese pound lost more than 95% of its value against the U.S. dollar,

The World Bank report said the government recorded an overall surplus of 3.9% of GDP in 2025. However, rising humanitarian and reconstruction needs after the recent war, pressure to increase public sector wages and slower revenue growth are expected to place additional strain on public finances in the second half of this year.

The report noted that continued progress on reforms remains essential to restoring confidence, reviving growth and supporting a durable economic recovery.

“Advancing reforms — particularly on banking sector restructuring and fiscal management –will be critical to restoring confidence, protecting stability and mobilizing the financing needed for reconstruction and recovery,” the World Bank’s Khalifa said.

The report noted that the banking sector remains deeply weakened despite some progress in advancing its restructuring agenda and warned that the exchange rate could come under pressure “if foreign inflows decline or conflict-related shocks persist.”

New Israeli air and artillery attacks have hit Lebanon after soldiers were killed for the first time since a fragile ceasefire began in June.

The latest military assault comes despite Lebanese-Israeli talks in Rome, part of a US-brokered peace process.

So, where do things stand now?

Presenter: James Bays

Guests:

Maha Yahya – Director of the Carnegie Middle East Center in Beirut

Jennifer Gavito – Former US Acting Principal Deputy Assistant Secretary of State for Near Eastern Affairs

Rami Khouri – Distinguished Public Policy Fellow at the American University of Beirut

Syrian authorities say they intercepted a shipment including missiles, rockets, and drones before it entered from Iraq.

Syria has seized a shipment of weapons, including missiles, at its border with Iraq, as authorities say they foiled an ⁠attempt to ⁠smuggle arms to Hezbollah in Lebanon, something the group denies.

Syria’s General Authority of Ports and Customs said on Thursday that the weapons shipment – which included long-range missiles, rockets and drones – was concealed inside “one of the oil tanker-trucks ⁠headed to the city of Baniyas”.

It was discovered during routine inspection procedures at the al-Tanf border crossing between Syria and Iraq after customs officers subjected the vehicle to a thorough search, Syria’s state news agency reported.

“According to the ministry, preliminary investigations based on evidence collected at the scene indicated that the shipment was intended to transit Syrian territory before being delivered to the Hezbollah terrorist militia in Lebanon,” SANA wrote, citing sources from Syria’s Interior Ministry.

The Iran-backed Lebanese group denied having any activity in Syria, dismissing the accusations in a statement on Thursday as “fabricated narratives with no basis in fact, aimed at harming Hezbollah”.

Syrian authorities are known to be hostile towards the group, as it was an ally of former president Bashar al-Assad before he was ousted in 2024 by members of the current government.

Following the seizure, Iraq said it would form ‌a high-level committee to investigate what happened. The military’s Joint Operations Command said Baghdad would coordinate with Syrian authorities to establish the circumstances of the attempted smuggling, hold those responsible to account, and strengthen security along the shared border.

The Baniyas route, where the tanker was passing through, has been used frequently in recent months for fuel movements between ⁠Iraq and Syria, since the main route through the Strait of Hormuz has been disrupted by the Iran war.

“This seizure from Syria is part of a broader reshaping of the region that has occurred over the last couple of years, particularly the fall of the Assad regime in Syria,” said Al Jazeera’s Heidi Pett, reporting from Lebanon.

“It used to be a very popular land route for Iran to traffic weapons and cash to its partner here in Lebanon, Hezbollah. They went from Iran, across Iraq, through Syria, and then here into Lebanon.”

“Under the Assad regime they [Iran] had very little trouble with that, but since the new [Syrian] President Ahmed al-Sharaa took power, he has been cracking down on that crossroad of smuggling,” Pett added.

A source at Syria’s Interior Ministry told SANA that “protecting Syria’s borders and safeguarding its national sovereignty remained a top priority, adding that it would not allow Syrian territory to be used as a transit route or launch point for arms smuggling or other activities that threaten the security of Syria or neighbouring countries”.

US President Donald ⁠Trump had spoken to Syria’s al-Sharaa about disarming Hezbollah, which is fighting Israeli forces occupying southern Lebanon. But Lebanese President Joseph Aoun’s office said al-Sharaa had assured him that Syria would not ‌take sides in Lebanon’s internal affairs, including fighting Hezbollah.

The Israeli Army has released footage of what it says are hidden tunnels under Lebanon’s historic Beaufort Castle, where it says Hezbollah’s command centres were housed. Israeli soldiers recaptured the 900-year-old fortress in June.

Khalil spent more than two decades protecting the nests of endangered turtle species in southern Lebanon.

Lebanese marine ecologist Mona Khalil, who was severely wounded after an Israeli strike hit her home near Tyre last week, has died, according to local reports.

Khalil, 77, succumbed to her wounds on Friday, the same day Israel escalated air attacks on southern Lebanon, killing at least 50 people and injuring dozens despite the risk posed to a fragile peace deal between Iran and the United States.

“It is with deep sadness that we mourn the passing of Mona Khalil today,” environmental group Live Love Tyre said in a Facebook statement on Friday.

“She will be remembered through an incredible legacy. Through it all, Mona chose to stay and care for the turtles of Live Love Tyre. Her life was selfless and impactful.”

A life of impact

Khalil was born in Lagos, Nigeria, in 1949. She spent several years abroad before moving to southern Lebanon.

A fleeting encounter with a turtle which had emerged from the ocean to lay its eggs on al-Mansouri beach near Tyre in 1999 propelled her on a lifelong journey devoted to animals.

She went on to dedicate decades to protecting the nesting sites of endangered loggerhead and green sea turtles on Lebanon’s southern coast.

Both species are highly threatened by coastal development, plastic pollution, fishing nets, and light pollution and are at risk of becoming extinct in the eastern Mediterranean.

In 2000, Khalil helped establish the Orange House, an eco-tourism project situated at al-Mansouri beach. She also helped document marine life in southern Lebanon and advocated for wildlife and against the pollution of Lebanon’s coastline.

“You have left us yet you remain within us – we, your children,” journalist and volunteer Fadia Joumaa, who worked closely with Khalil, said in a tribute shared on Facebook.

Khalil’s death “is a loss for all of Lebanon… not just for us. A loss for the life you guarded so faithfully,” she said.

BEIRUT, Lebanon, June 16 (UPI) — Lebanon’s economy, shattered by the 2019 financial collapse, has suffered another major shock from the Israel-Hezbollah war, which has disrupted recent recovery efforts and hit the tourism sector — the country’s main revenue generator — particularly hard.

The war, which began in October 2023 when Hezbollah opened a support front for Gaza, escalated as Israel intensified its attacks and the Iran-backed regime resumed fighting in solidarity with Iran last March after 15 months of inactivity. It further deepened Lebanon’s economic crisis and left the country grappling with its repercussions.

Direct and indirect losses are initially estimated at $20-30 billion, reflecting extensive destruction and mass displacement caused by the conflict, along with severe disruptions to economic activity. Inflationary pressures have also intensified due to the closure of the Strait of Hormuz.

Nearly every sector of the economy has been affected.

The escalation in March dramatically expanded the scale of destruction, with more than 70 villages in southern Lebanon reduced to ruins by advancing Israeli troops. Entire neighborhoods were leveled, while businesses, public infrastructure, schools, hospitals, and roads suffered extensive damage.

Beirut’s southern suburbs and parts of the Bekaa Valley in eastern Lebanon were also heavily targeted by Israeli airstrikes, resulting in similar devastation.

Beyond the heavy casualty toll of 3,826 killed and 11,851 injured since March 2, the widespread physical destruction, and the displacement of 1.2 million people forced to flee their homes and villages under Israeli evacuation orders, the war has also resulted in significant indirect losses.

Unemployment rose as job losses mounted, while recession and inflation eroded household purchasing power, making people poorer.

The tourism sector was also badly hit, and the economy is expected to contract by between 7% and 10% in 2026 if the war continues, according to estimates by Finance Minister Yassine Jaber.

More critically, the recent escalation came as the reform-minded government of Prime Minister Nawaf Salam had begun putting the country on a path to recovery, and the economy was starting to pick up.

Despite the war — largely concentrated in southern Lebanon at that time — 2025 ended on a positive note, with the World Bank reporting modest GDP growth of 3.5 percent and a rebound in tourism.

A key highlight was a visit by Pope Leo XIV, which raised hopes and called for peace, alongside approximately 1.63 million visitors; an increase of 44.6% compared with the previous year.

“That showed that demand for Lebanon was returning… The escalation in March interrupted that momentum,” Tourism Minister Laura Khazen Lahoud told UPI.

Lahoud explained that the collapse became visible in cancellations, empty restaurants, very low hotel occupancy, and travel agencies shifting from selling trips to managing cancellations.

According to figures released by the relevant syndicates, travel and tourism activity declined by around 80%, while hotel occupancy in Beirut fell to roughly 7-10%, occasionally reaching 12%.

Tourism activity became concentrated in “a very small number of spots,” where hotels sought to attract displaced people seeking refuge in safer areas, according to Lahoud.

Charles Arbid, President of Lebanese Economic Social and Environmental Council, explained that the country was in “a state of stagflation,” with little economic activity or production, inflation reaching 20%, and businesses closing down or partially operating.

“This is a catastrophic economic situation, following a prolonged period of weak growth and the accumulation of structural economic problems,” Arbid said in an interview with UPI, referring to the drop in government revenues due to the inability to pay taxes and the complete halt of economic activity in southern Lebanon.

He was particularly concerned about the impact of the war on the population, as many were losing their jobs and depleting their remaining savings to cope with the spiraling inflation.

He said Lebanon is facing “a social and societal crisis,” exacerbated by the massive displacement, and would need a “Marshall Plan” for reconstruction, rehabilitation of its crumbling infrastructure, securing the return of the displaced to their villages, and supporting economic recovery.

In the meantime, many are struggling to keep their businesses afloat and secure an income.

Mohammad Farid, who has been displaced three times with his wife and son from their home in Beirut’s southern suburbs since 2024, has not given up despite suffering heavy losses: $250,000 after an Israeli strike destroyed a solar panel project he had co-partnered in the village of Ansar in southern Lebanon, and about $100,000 from two shops badly damaged in Israeli strikes in Beirut’s southern suburbs.

Farid and his wife, Malak, had started a new business, Oilganic, specializing in cold-pressed organic oils shortly before the 2023 war erupted, importing oil press machines from China and renting their first shop.

Their business began to flourish, expanding into online sales and building a strong reputation.

“That came to a halt when the war extended to our area, forcing us to leave and then return after a truce was reached, rent a new shop, and see it destroyed again months later,” Farid told UPI.

They were again displaced, taking refuge at their friends’ house in the mountains, where they resumed production on a smaller scale using small oil-press machines.

“We are doing our best so as not to lose our clients,” Farid said, determined to grow his business and relocate to his native border village of Naqoura in southern Lebanon after the war ends. “I want to go back to the south, rebuild our house, and continue my oil business there. This is our land, and we will never give it up.”

A glimmer of hope for ending the longest and most devastating war between Israel and Hezbollah emerged after the United States and Iran reached a memorandum of understanding, which was due to be signed in Geneva on Friday.

The agreement includes a full ceasefire in Lebanon, which has not yet been fully observed by either side.

A cessation of hostilities, or even a durable de-escalation, could bring much-needed relief, starting with salvaging part of the summer tourism season, largely relying on Lebanese expatriates and the diaspora.

Lahoud said the diaspora would help sustain the sector but noted that a very large segment of the diaspora, whether in West Africa or northern Europe, originates from southern Lebanon and would be less likely to visit this year.

She explained that the tourism sector has survived repeated shocks, but emphasized that “businesses cannot absorb losses indefinitely,” with hotels, restaurants, travel agencies, transport companies, event organizers, and seasonal workers remaining under real pressure.

As the region is being reshaped by major developments, Lebanon is looking to close the chapter of war and move into a period of peace, engaging in U.S.-mediated direct negotiations with Israel for the first time.

Arbid appeared confident that Lebanon “is heading into a better phase,” one that would require a new political understanding and security stability.

“That would pave the way for reconstruction and recovery… It will be a long journey, but we will make it in the end,” he said.

The announcement of a preliminary US-Iran agreement has generated cautious optimism in Lebanon, where months of conflict have displaced large portions of the population and devastated communities across the south.

While the framework reportedly calls for the immediate cessation of military operations, Lebanese authorities are warning residents against assuming that conditions are safe enough for a rapid return.

The caution reflects uncertainty over how the agreement will be implemented and whether all parties will abide by its terms.

Adding to those concerns, Israel has made clear that it does not consider itself bound by the agreement and intends to maintain security zones in southern Lebanon.

Lebanon became one of the principal battlegrounds of the wider regional conflict after Hezbollah opened a front against Israel in support of Iran following the outbreak of hostilities.

The resulting escalation led to extensive Israeli military operations across southern Lebanon, causing widespread destruction and one of the largest displacement crises in the country’s recent history.

Entire communities were uprooted as residents fled bombardment and military activity.

Iran consistently pushed for any agreement with Washington to include provisions addressing Lebanon, viewing the conflict there as inseparable from broader regional tensions.

The inclusion of Lebanon in the framework agreement therefore represents a significant diplomatic concession and a central element of Tehran’s negotiating position.

Why This Matters

Lebanon has become one of the clearest examples of how regional conflicts can produce devastating humanitarian consequences.

The conflict has:

• Displaced more than a million people.
• Damaged homes, infrastructure, and businesses.
• Increased pressure on Lebanon’s already fragile economy.
• Deepened political and social instability.

A durable ceasefire could allow reconstruction efforts to begin and reduce the risk of further regional escalation.

However, the humanitarian benefits will depend on security conditions improving on the ground rather than merely on diplomatic declarations.

The Challenge of Returning Home

For displaced families, peace announcements do not automatically translate into confidence.

Many residents remain uncertain about:

• Whether military operations have truly ended.
• The presence of Israeli forces in southern areas.
• The condition of homes and infrastructure.
• Future security guarantees.

The hesitation expressed by displaced residents reflects a broader reality in conflict zones: trust often takes much longer to rebuild than physical infrastructure.

Even if active fighting stops, communities may remain reluctant to return until they believe the risk of renewed conflict has genuinely diminished.

Israel’s Position Complicates the Picture

A major obstacle to immediate normalization is Israel’s position.

Israeli officials have indicated they will continue maintaining security zones and reserve the right to conduct operations they deem necessary for national security.

This creates ambiguity regarding implementation of the broader agreement.

While the US-Iran framework may establish a diplomatic foundation for reducing violence, the practical situation on the ground will depend on decisions made by actors who were not direct participants in the negotiations.

This distinction could prove crucial in determining whether the agreement produces lasting stability.

A Test of Regional Diplomacy

The inclusion of Lebanon in the agreement demonstrates how interconnected Middle Eastern conflicts have become.

The war was never confined solely to the United States and Iran. It involved multiple regional actors, proxy groups, and overlapping security concerns.

As a result, success will be measured not only by whether Washington and Tehran uphold their commitments but also by whether the agreement influences behavior across the broader region.

Lebanon is likely to become one of the first and most visible tests of that process.

Key Stakeholders

• Lebanon and its government institutions
• Displaced Lebanese civilians
• Israel and its military leadership
• Hezbollah
• Iran
• The United States
• Regional mediators including Pakistan
• Humanitarian organizations operating in Lebanon

What to Watch Next

• Whether military activity in southern Lebanon decreases in the coming days.
• Israeli decisions regarding security zones.
• Hezbollah’s official response to the agreement.
• The pace of civilian returns to southern communities.
• International support for reconstruction and humanitarian assistance.
• Broader negotiations during the 60-day ceasefire period.

The agreement creates an opportunity for Lebanon to move toward greater stability after months of destruction and displacement.

If implemented successfully, reduced hostilities could pave the way for reconstruction, humanitarian relief, and the gradual return of displaced populations.

Yet significant uncertainty remains. Security concerns, damaged infrastructure, and competing interpretations of the agreement could slow progress and complicate efforts to restore normalcy.

For many Lebanese families, the end of active conflict would represent only the beginning of a much longer recovery process.

Analysis

The most revealing aspect of Lebanon’s reaction is the disconnect between diplomacy and reality.

International leaders may celebrate ceasefires and framework agreements, but people living through conflict judge peace by different standards. They look not at official statements but at troop movements, security conditions, and whether it is safe to return home.

That gap is already visible in southern Lebanon. While diplomats describe the agreement as a breakthrough, local authorities are warning residents against rushing back. Israel’s decision to maintain security zones further reinforces uncertainty about how quickly conditions can normalize.

This highlights a recurring challenge in conflict resolution. Agreements can stop wars on paper, but rebuilding trust often takes far longer than negotiating a ceasefire.

Lebanon’s experience may therefore become a key measure of whether the US-Iran agreement delivers meaningful change beyond diplomatic symbolism. If displaced communities can safely return, reconstruction begins, and violence declines, the agreement will gain credibility. If insecurity persists despite the deal, questions will quickly emerge about its effectiveness.

Ultimately, Lebanon represents the human dimension of the broader regional settlement. The success of the agreement will not be judged solely by geopolitical outcomes or energy markets but by whether ordinary people feel secure enough to rebuild their lives after months of war.

With information from Reuters.

Videos show the aftermath of an Israeli attack on Beirut’s southern suburbs, with multiple explosions reported. Israel says it targeted Hezbollah headquarters, while Lebanese media says residential apartments were hit. The attack comes just days after US President Donald Trump told Benjamin Netanyahu that Beirut was off limits as Washington pursues a deal with Iran.

Israel and the Lebanese government have agreed to implement a new US-mediated ceasefire, the Trump administration has said, despite Israel’s defence minister insisting the military will continue operations in Lebanon.

Furthermore, while Lebanese President Joseph Aoun said on Thursday that the ceasefire would come into force within 24 hours of approval by all concerned parties, Hezbollah leader Naim Qassem has dismissed the deal, labelling it a “surrender and defeat”.

The Trump administration announcement comes just weeks after a previous agreement to cease hostilities was supposedly reached on April 16. Since then, however, more than 600 people have been killed in Israeli strikes across Lebanon while Israel has expanded its military presence in the south of the country, now occupying about one-fifth of the country.

The renewed diplomatic push also comes as Washington pursues parallel shuttle negotiations with Iran. Tehran, a close ally of Hezbollah, has made a ceasefire in Lebanon a condition for any broader agreement to end the war with the US and has repeatedly called for Israel to withdraw from southern Lebanon.

Iran’s position was underlined when Quds Force commander Esmail Qaani said the baseline demand in Lebanon is for Israeli forces to withdraw to the positions they held before the start of the US-Israel war on Iran at the end of February – a demand that is not explicitly reflected in the agreement.

Iran and Hezbollah’s responses to the US announcement, coupled with Israel’s insistence that military operations will continue, have cast serious doubt on its viability. Critics of Israel’s war on Lebanon also point to the April truce, which they say has completely failed to halt Israeli attacks or Israel’s occupation of the south of the country.

What has been announced?

According to the Trump administration, Israel and Lebanon have agreed to implement a ceasefire contingent on a “complete cessation” of Hezbollah fire and the evacuation of its fighters from the area south of the Litani River.

The agreement also calls for the creation of “pilot zones” where Lebanese Armed Forces would take exclusive control “to the exclusion of all non-state actors”. The stated aim is to move towards a wider political and security agreement, including the dismantling of non-state armed groups and preventing their re-emergence.

But Hezbollah was not party to the talks and has already rejected the agreement. Lebanon was represented by government diplomats, even though the Lebanese army is not a party to this conflict.

According to the wording of the agreement, the parties are due to reconvene during the week of June 22 to continue diplomatic and security talks, with the US facilitating communications in the meantime. It remains unclear if that stage of the agreement will ever be reached.

What was agreed in April?

The April agreement used different language, saying Israel and Lebanon would implement a “cessation of hostilities” from April 16, and never actually used the word ceasefire.

It also included a clause allowing Israel to “take all necessary measures in self-defence, at any time, against planned, imminent or ongoing attacks”.

That clause does not appear in the new text, which could be interpreted as a small concession. That was until Israel Katz said Israel would continue its military operations in Lebanon regardless.

The latest agreement also repeats Israel’s longstanding demand that Hezbollah withdraw from south of the Litani River.

Meanwhile, there is one major glaring omission. While the text focuses heavily on Hezbollah’s withdrawal from parts of southern Lebanon, it does not mention Israel’s withdrawal from southern Lebanon.

Lebanese journalist and analyst Souhayb Jawhar told Al Jazeera the agreement is defined as much by what it leaves out as by what it includes.

The text, he said, focuses on Hezbollah’s obligations and those of the Lebanese state: removing armed elements from south of the Litani and creating zones where the Lebanese army holds exclusive control.

“This point alone explains much of the scepticism within Hezbollah and its political environment,” Jawhar told Al Jazeera. “From the party’s perspective, any agreement should include a clear ceasefire, an Israeli withdrawal, and a framework for addressing outstanding issues, rather than becoming a document focused primarily on restructuring Lebanon’s internal security landscape.”

What else is different this time?

Other points of contention regarding the new agreement are the “pilot zones”, which appear to go beyond stopping the fighting and instead test a new security model in southern Lebanon – one that could eventually be expanded elsewhere, analysts say.

“This is why many observers see these zones as the beginning of a gradual transition from a security environment in which Hezbollah played the dominant role to one in which the Lebanese state and its armed forces become the sole security authority,” Jawhar said.

He added that the fate of the agreement may depend less on Lebanon-Israel talks than on the US-Iran track. If Washington and Tehran reach a wider understanding, the ceasefire in Lebanon will have a stronger chance of holding because both sides will have an interest in stabilising the Lebanese front.

“If those negotiations stall or collapse, Lebanon could quickly return to being one of the main arenas of pressure and confrontation between the two sides,” Jawhar added.

What is the situation in Lebanon now?

Southern Lebanon remained under heavy military pressure on Thursday, with Israeli strikes on Kafra and al-Mansouri in the southwest of the country. In the Bekaa Valley, one person was killed and four others wounded in an Israeli strike on Sohmor, according to Lebanon’s state-run National News Agency (NNA).

A separate strike hit Tell al-Aqareb, while further raids targeted Haddatha, Tibnin, Haris, and Harin. The NNA also reported more Israeli strikes across southern Lebanon as drones flew at low altitude over Beirut. In Maaroub, one person was killed and another wounded when Israeli forces targeted a motorcycle.

Israeli warplanes also struck towns and villages across the south, including Zawtar al-Sharqiya, Zawtar al-Gharbiya, Shoukin, Barachit, Srifa, Zibdin, Haris and Deir Zahrani. Jets and drones have also been flying over the south for much of the morning, including a drone seen at extremely low altitude over Tyre.

Lebanon’s Civil Defence authorities have warned people not to return south, citing the continued danger to civilian life in towns and villages across southern Lebanon.

More than 3,000 people have been killed, and more than one million have been forced from their homes since Israel renewed its assault on Lebanon in early March.