Peace or War? Lebanon on the Brink

The atmosphere is oddly uneasy at the Music Hall in downtown Beirut: Most of the red velvet sofas are empty, few people hang around the long, well-stocked, high-tech bar, and waiters stand in line, uncalled.

"We had 300 reservations at the beginning of the week," said one of them. "Only 70 confirmed. People chose to stay at home."

Even the most talented artists of the evening -- the Palestinian Charlie Brothers -- cannot do much to cheer up their small, mainly 20-something audience.

Welcome to Beirut on edge. After a week that saw political opponents twice taking to the streets, with deadly consequences, Lebanon is poised between fear of civil war coming back and attempting to look at the future with hope.

Bitterness Among the Young

Leila Saad is bitter.

"When I was born, the country was like this -- and when I'll die it will be the same," the 25-year-old woman told ABC News.

Her words reflect the widespread pessimism among young people in a country where the 20 percent unemployment rate and $600 average salary push many of Lebanon's best and brightest to make a beeline overseas.

Still trying to recover from the 33-day-long war between Hezbollah and Israel last summer, which claimed 1,200 lives and caused $2 billion damage, Lebanon has been stuck in political deadlock since November.

Accusing the government of wanting Israel to destroy its guerrilla forces in line with U.S. wishes, five Shiite ministers -- from Hezbollah and the Amal group -- walked out of the cabinet, followed by the Christian representative belonging to the Free Patriotic Movement (FPM).

Since then, the opposition has staged two months of peaceful sit-ins in front of the Parliament in a bid to topple Prime Minister Fouad Siniora. He has refused the opposition's demand for a veto-wielding share of the cabinet and the call for new parliamentary elections.

The political confrontation has fallen along sectarian lines: Shiite Muslims -- including Hezbollah and the Amal group, whose leader, Berri, is speaker of the parliament -- support the opposition, while Sunni Muslims are mainly behind the prime minister.

The Christian parties are harshly divided between the two camps. The FPM, led by presidential contender Gen. Michel Aoun, is a key ally of the opposition front, while Samir Geagea, leader of the militia Lebanese Forces, backs Siniora.

The alliance between Hezbollah and the Christian Maronite of Aoun has been strongly controversial -- an unusual event for a country with a unique confessional-based political system where, according to the constitution, the president has to be a Christian, the prime minister a Sunni and the speaker of the parliament a Shiite.

Conflict Spreads

The political conflict spilled over into violence twice over the past week -- first with a general strike called by the opposition Tuesday, which paralyzed much of the country and led to clashes, and then in a further confrontation between government loyalists and opposition supporters in Beirut on Thursday. Both events escalated swiftly and claimed seven dead and hundreds of wounded.

Scenes across the capital were reminiscent of the country's brutal 1975-1990 civil war -- burning cars and tires, Molotov cocktails, roadblocks, reports of snipers on rooftops and a curfew for the first time in the country since 1996. Giving the wrong answer to the question, "Sunni or Shiite?" was enough to trigger an attack.

As the clashes progressed, government leaders pleaded for calm and Hezbollah leader Sayyed Hassan Nasrallah released an unexpected fatwa urging residents to respect the curfew.

The violence sparked while Paris was hosting the donor conference for Lebanon, the so-called Paris III. From the French capital, Siniora called for restraint.

"What are we doing? No one can help a country where its own people can't help themselves," he said on the Lebanese television station, LBC. "We have to set an example for those people who came from all over, and are watching Lebanon, that we are trying to build a country, not a battlefield."

The premier returned home with more than $7.6 billion in grants and soft loans -- $770 million pledged by the United States -- granted by 36 countries to help Lebanon cope with a debt mountain of more than $40 billion, recover from war and support an unpopular package of economic reforms.

A political solution seems desperately needed.

"We have reached the boiling point, and the political leaders have realized this. All parties are stuck at this point, though it doesn't seem the violence will escalate," Oussama Safa, a conflict negotiator and director of the Lebanese Center for Policy Studies told ABC News.

"Leaders on both side know that they need to reach a compromise," he added. "Despite Hezbollah still being popular because of their social support, especially in health care and education, people are starting to distrust their political agenda, not perceiving them as a peaceful actor in this crisis."

With Some, Pessimism Runs Rampant

On the other hand, Edward Saab, executive editor of An-Nahar, the leading newspaper in Lebanon, fears escalation.

"I cannot help but be pessimistic," he told ABC News.

"If we have elections, Shiites and Christians will win," Youssef, a Sunni taxi driver, said while driving through pot-holed streets and bomb-scarred apartment blocks in the Hezbollah-controlled suburbs in Beirut.

Labeled as a terrorist group by the United States, Hezbollah is backed by Iran and Syria, and Siniora's government has accused its members of pursuing Tehran's interests rather than Lebanon's. The signs of Iran's influence are widespread. Gigantic banners of the leader Hassan Nasrallah cover building facades, side by side with portraits of Supreme Leader Ali Khamanei.

Within days of the end of the war, Hezbollah was granting $12,000 in cash to families whose houses were destroyed, with little doubt about where the money was coming from.

"It is not a secret that part of it comes from Iran," Bilal Naim, a member of the Executive Council of Hezbollah, told ABC News in a tent set up in a leveled area in Dahie, south Beirut. "Shiites are bound to the khomos. They devote 20 percent of their salaries to go to social causes. Our brothers in Iran helped us with this difficult reconstruction."

Back in the center of town, a sit-in staged by the opposition near the parliament enters its eighth week. Festooned on row after row of tents are posters of Maronite Aoun and Hassan Nasrallah.

"This government is corrupt," said Mohammed, just one of the youngsters who has been there since the beginning of December. "We will not leave 'til Siniora will come to terms with our request."

A teenager from Qana who supports the Amal group, Mohammed shares a tent in the makeshift camp.

"I spent last summer recovering bodies with an ambulance," he said. "It was horrible -- children, women. … Where was the government when Israel was killing us?"