Meanwhile, Israeli Prime Minister Ehud Olmert said countries that don't have diplomatic relations with Israel should not be permitted to contribute troops to an international peacekeeping force for southern Lebanon. That would eliminate Indonesia, Malaysia and Bangladesh - among the only countries to have offered front-line troops for the expanded force.

Olmert also ruled out peace talks with Syria as long as it supports "terror organizations." Earlier Monday, a top government official suggested it was time to resume talks with Syria despite its support for Hezbollah.

With concern mounting over the fragile truce, Israel sent war planes Monday over the coastal city of Tripoli, some 35 miles north of Beirut, and over Baalbek, scene of an Israeli commando raid two days ago which Israel said was to disrupt weapons shipments for Hezbollah from Syria.

Lebanon considers overflights a violation of the U.N. resolution that ended 34 days of fighting last week.

Olmert also ruled out peace talks with Syria as long as it supports "terror organizations." Earlier Monday, a top government official suggested it was time to resume talks with Syria despite its support for Hezbollah.

With concern mounting over the fragile truce, Israel sent war planes Monday over the coastal city of Tripoli, some 35 miles north of Beirut, and over Baalbek, scene of an Israeli commando raid two days ago which Israel said was to disrupt weapons shipments for Hezbollah from Syria.

Lebanon considers overflights a violation of the U.N. resolution that ended 34 days of fighting last week.

Defense Minister Elias Murr said he was confident that Hezbollah would hold its fire but warned Syrian-backed Palestinian militants against rocket attacks which might draw Israeli retaliation and re-ignite full-scale fighting.

"We consider that when the resistance (Hezbollah) is committed not to fire rockets, then any rocket that is fired from the Lebanese territory would be considered collaboration with Israel to provide a pretext (for Israel) to strike," he said Sunday.

Israel has long accused Syria, along with Iran, of arming and supporting Hezbollah. During the war, however, Israel avoided trying to draw Syria into the conflict, apparently fearing another front or closing peace options.

On Monday, Public Security Minister Avi Dichter said Israel should resume the negotiations that broke down in 2000.

"What we did with Egypt and Jordan is also legitimate in this case," Dichter told Israeli Army Radio. Asked if that meant Israel should withdraw to its international border with Syria, giving up the Golan Heights region Israel captured in the 1967 Mideast War, he said: "Yes."

But Olmert ruled out talks with the Syrians unless they stop sponsoring "terror organizations."

"I recommend not to get carried away with any false hopes," Olmert said Monday, during a tour of northern Israel. "When Syria stops support for terror, when it stops giving missiles to terror organizations, then we will be happy to negotiate with them. ... We're not going into any negotiations until basic steps are taken which can be the basis for any negotiations."

Vice Premier Shimon Peres said Israel had other concerns at the moment. "We have the burden of Lebanon and we have the negotiations with the Palestinians," he told Israel Radio. "I don't think a country like ours can deal with so many issues at a time."

As part of the cease-fire agreement, Lebanon has begun deploying 15,000 soldiers to the south, putting a government force in the region for the first time in four decades. They are to be joined by an equal force of international peacekeepers, but wrangling among countries expected to send troops has so far delayed assembly of the force.

The reluctance of European countries to commit substantial numbers of troops has raised doubts about whether the truce can hold.

France, which commands the existing force U.N. peacekeeping force in Lebanon known as UNIFIL, had been expected to make a significant new contribution that would form the backbone of the expanded force. But President Jacques Chirac disappointed the U.N. and other countries last week by merely doubling France's contingent of 200 troops.

French Foreign Minister Philippe Douste-Blazy said he has called for a meeting of European Union diplomats in Brussels this week to "find out as rapidly as possible what the different European partners plan to do concerning Lebanon."

Douste-Blazy indicated more European troops could be sent later, once the U.N. has clarified the mandate of the force, including the rules of engagement.

In Lebanon, Prime Minister Fuad Saniora, a Sunni Muslim, and parliament speaker Nabih Berri, a Shiite and Hezbollah supporters, decried the destruction wrought by Israeli bombs as "crimes against humanity" during a highly publicized tour of the devastated guerrilla stronghold in Beirut's southern suburbs on Sunday.

"What we see today is an image of the crimes Israel has committed. ... There is no other description other than a criminal act that shows Israel's hatred to destroy Lebanon and its unity," Saniora said to a big crowd of reporters and television crews invited on the tour of the region where Israeli airstrikes destroyed whole neighborhoods.

"I hope the international media transmits this picture to every person in the world so that it shows this criminal act, this crime against humanity," the Western-backed prime minister said.

Arab League foreign ministers convened for an emergency meeting in Cairo to discuss a plan to create a fund to rebuild Lebanon. The meeting ended with no plan, but foreign ministers said a social and economic council would convene to discuss how to fund the rebuilding.

Diplomats said Arabs want to counter the flood of money that is believed to be coming from Iran to Hezbollah to finance reconstruction projects. An estimated 15,000 apartments were destroyed and 140 bridges hit by Israeli bombardment in Lebanon, along with power and desalination plants and other key infrastructure.

"This is a war over the hearts and mind of the Lebanese, which Arabs should not lose to the Iranians this time," said a senior Arab League official, speaking on condition of because he is not authorized to talk to the media.

Hezbollah leader Sheik Hassan Nasrallah has not said where the money would come from, but Iran, which helped create Hezbollah and is its strongest supporter, is widely believed to have opened its treasury for the rebuilding program.

Witnesses said the tanks, supported by unmanned drones in the sky, entered eastern Gaza near the Karni crossing, the main terminal for goods entering and leaving the densely populated strip.

At least three Palestinian fighters in eastern Gaza were wounded when they were hit by a missile fired by one of the drones.

An army spokesman said the raid in eastern Gaza targeted five wanted Palestinians, including two members of the Islamic militant group Hamas, which controls the Palestinian government.

"Forces surrounded a house in which the five wanted Palestinians were located," the spokesman said. "Some exchanges of fire occurred during which one of the wanted men was injured. The five were arrested and taken for questioning."

The spokesman said weapons were found in the house.

Israeli tanks and bulldozers also entered a village east of Khan Younis on Tuesday morning. At least two Palestinian civilians were wounded in the clashes, including the 14-year-old, witnesses said.

Israel has frequently carried out brief incursions into the Gaza Strip since launching an air and ground offensive in late June to rescue a soldier captured by Palestinian militants and to stop rocket fire from the strip into Israel.

Overnight, Israel carried out air strikes at houses in Jabalya, a district of Gaza City, in the northern part of the strip, and the southern Gaza town of Rafah after telling residents to leave their homes, witnesses said.

They said the strikes were apparently aimed at the homes of members of Hamas and Islamic Jihad.

Gaza, a narrow coastal piece of land that is home to 1.4 million Palestinians, was occupied by Israeli troops until August last year, when soldiers and about 8,000 Jewish settlers pulled out after nearly 40 years of occupation.

A week ago, armed men kidnapped two journalists from the Fox TV network, an American and a New Zealander, as they were working in Gaza City. There has been no word on their whereabouts and no claim of responsibility for their abduction.

While kidnappings have not been uncommon in Gaza in recent years, most abductions are resolved in a matter of hours without any harm being done.

Europe has been slow to make any firm troop commitments, and U.N. officials have called on the Europeans to offer more troops to balance pledges from Muslim countries.

During a phone conversation with Italian Prime Minister Romano Prodi, Olmert suggested that Italy lead the international force, Olmert's office said in a statement. Prodi said Italy intends to send a "significant" force and that he would take up the matter with his parliament as soon as possible, the statement said.

Piero Fassino, who leads the largest party in Prodi's center-left coalition, also said in an interview published Sunday that Italy would be willing to lead the force in Lebanon should the United Nations ask it to. The U.N. wants 3,500 troops on the ground by Aug. 28.

Olmert's announcement on which nations should not contribute troops further complicates efforts by the United Nations to form the 15,000-strong peacekeeping force, which along with an equally large Lebanese army contingent will help enforce the truce that ended 34 days of fighting between Israel and the Lebanese guerrilla group Hezbollah.

The announcement, which came shortly before the arrival of U.N. envoy Terje Roed-Larsen in Israel, was made during the weekly meeting of his Cabinet, his office said.

"The prime minister said that countries without diplomatic relations with Israel should not comprise the international force," said David Baker, an official in Olmert's office said.

Indonesia, Malaysia and Bangladesh _ Muslim countries that do not have diplomatic ties with Israel _ are among the only countries to have offered front-line troops for the expanded force.

The U.N. cease-fire resolution does not explicitly give Israel authority to block countries from joining the peacekeeping mission, but it does say the force should "coordinate its activities ... with the government of Lebanon and government of Israel."

"Israel believes that it's best that we have the ability to be able to communicate with the international forces," said Foreign Ministry spokesman Mark Regev. "As a practical matter, we would have a problem if the international forces don't have the ability to talk to us."

Regev said the composition of the force should be coordinated between Israel and Lebanon, just as the cease-fire resolution was. He also urged the wider international community to follow through on its commitment to provide troops, saying the cease-fire could be in danger if the peacekeepers don't quickly deploy.

France's Foreign Minister Philippe Douste-Blazy told French radio France Info on Sunday that he has asked Finland, which holds the rotating presidency of the 25-member bloc, to call a meeting of EU diplomats in Brussels this week to "find out as rapidly as possible what the different European partners plan to do concerning Lebanon."

France, which commands the existing force U.N. peacekeeping force in Lebanon known as UNIFIL, had been expected to make a significant new contribution that would form the backbone of the expanded force. But Chirac disappointed the U.N. and other countries last week by merely doubling France's contingent of 200 troops.

Douste-Blazy indicated more could be sent at a later date, once the U.N. has clarified the mandate of the force.

"I think we are going to have two phases, an emergency phase which must fall into place right away ... and then there will be a second phase, which will be the phase where we will commit the definitive number (of troops)," he told France Info.

"Beyond the emergency phase, we want to obtain clarification from the United Nations about the mandate of UNIFIL, about the chain of command, how it is going to be organized, how it should report actions and to whom, and also the rules of engagement," he said.

U.S. Secretary of State Condoleezza Rice spoke by phone with Italian Foreign Minister Massimo D'Alema on Sunday and encouraged Italy to seek a "strong role" in the peace force, the foreign ministry said in a statement.

Rice also "expressed the strong appreciation and full backing of Washington for the action that Italy is carrying out aimed at implementing the resolution," the ministry said.

The fact that the government and scientists are seriously investing their hopes in such schemes tells us more about Israel's vision of the "new Middle East" than acres of analysis.

Israel regards the "home front" -- its civilian population -- as its Achilles' heel in the army's oppression of the Palestinians in the occupied territories, its intermittent invasions of south Lebanon, and its planned attacks further afield. The military needs the unconditional support of the country's citizenry and media to sanction its unremitting aggression against Israel's "enemies", but fears that the resolve of the home front is vulnerable to the threat posed by rockets landing in Israel, whether the home-made Qassams fired by Palestinians over the walls of their prison in Gaza or the Katyushas launched by Hizbullah from Lebanon.

Certainly Israel's leaders are not ready to examine the reasons for the rocket menace -- or to search for solutions other than of the missile-catching variety.

The bloody nose Israel received in south Lebanon has not shaken its leaders' confidence in their restless militarism. If anything, their humiliation has given them cause to pursue their adventures more vigorously in an attempt to reassert the myth of Israeli invincibility, to distract domestic attention from Israel's defeat at the hands of Hizbullah, and to prove the Israeli army's continuing usefulness to its generous American benefactor.

If Israel's soldiers ever leave south Lebanon, expect a rapid return to the situation before the war of almost daily violations of Lebanese airspace by its warplanes and spy drones, plus air strikes to "rein in" Hizbullah and regular attempts on its leader Hassan Nasrallah's life. Expect more buzzing by the same warplanes of President Bashar al-Assad's palace in Damascus, assassination attempts against Hamas leader-in-exile Khaled Meshal and attacks on Hizbullah "supply lines" in Syria. Expect more apocalyptic warnings, and worse, to Iran over its assumed attempt to join Israel in the exclusive club of nuclear armed states. And, of course, expect many more attacks by ground and air of Gaza and the West Bank, with the inevitable devastating toll on Palestinian lives.

Despite its comeuppance in Lebanon, Israel is not planning to reconfigure its relationship with its neighbours. It is not seeking a new Middle East in which it will have to endure the same birth pangs as the "Arabs". It does not want to engage in a peace process that might force it to restore, in more than appearance, the occupied territories to the Palestinians. Instead it is preparing for more asymmetrical warfare -- aerial bombardments of the kind so beloved by American arms manufacturers.

The weekend's swift-moving events should be interpreted in this light. Israel, as might have been expected, was the first to break the United Nations ceasefire on Saturday when its commandoes attacked Hizbullah positions near Baalbek in north-east Lebanon, including air strikes on roads and bridges. It was not surprising that this gross violation of the ceasefire passed with little more than a murmur of condemnation. The UN's Terje Roed-Larsen referred to it as an "unwelcome development" and "unhelpful". The UN peacekeeping force in Lebanon, UNIFIL, whose current job it is to monitor the ceasefire, refused to comment, saying the attack occurred outside the area of its jurisdiction -- an implicit admission of how grave a violation it really was.

Meanwhile in the media, the Associated Press called the military assault "a bold operation", and BBC World described it as a "raid" and the ensuing firefight between Israeli troops and Hizbullah as "clashes". Much later in its reports, the BBC noted that it was also a "serious breach" of the ceasefire, neglecting to mention who was responsible for the violation. That may have been because the BBC's report was immediately followed by Israeli spokesman Mark Regev accusing Hizbullah, not Israel, of violating the ceasefire. Predictably he accused Hizbullah of receiving transfers of weapons that the Israeli army operation was supposedly designed to foil.

In fact, this was no simple "clash" during an intelligence-gathering mission, as early reports in the Israeli media made clear before the official story was established. Israeli special forces launched the covert operation to capture a Hizbullah leader, Sheikh Mohammed Yazbak, way beyond the Litani River, the northern extent of Israel's supposed "buffer zone". The hit squad were disguised not only as Arabs -- a regular ploy by units called "mistarvim" -- but as Lebanese soldiers driving in Lebanese army vehicles. When their cover was blown, Hizbullah opened fire, killing one Israeli and wounding two more in a fierce gun battle.

(It is worth noting that, according to the later official version, Israel's elite forces were exposed only as they completed their intelligence work and were returning home. Why would Israel be using special forces, apparently in a non-belligerent fashion, in a dangerous ground operation when shipments of weapons crossing from Syria can easily be spotted by Israel's spy drones and its warplanes?)

It is difficult to see how this operation could be characterised as "defensive" except in the Orwellian language employed by Israel's army -- which, after all, is misleadingly known as the Israel Defence Forces. UN Resolution 1701, the legal basis of the ceasefire, calls on Israel to halt "all offensive military operations". How much more offensive could the operation be?

But, more significantly, what is Israel's intention towards the United Nation's ceasefire when it chooses to violate it not only by assaulting Hizbullah positions in an area outside the "buffer zone" it has invaded but also then implicates the Lebanese army in the attack? Is there not a danger that Hizbullah fighters may now fire on Lebanese troops fearing that they are undercover Israeli soldiers? Does Israel's deceit not further weaken the standing of the Lebanese army, which under Resolution 1701 is supposed to be policing south Lebanon on Israel's behalf? Could reluctance on the part of Lebanon's army to engage Hizbullah as a result not potentially provide an excuse for Israel to renew hostilities? And what would have been said had Israel launched the same operation disguised as UN peacekeepers, the international force arriving to augment the Lebanese soldiers already in the area? These questions need urgent answers but, as usual, they were not raised by diplomats or the media.

On the same day, the Israeli army also launched another "raid", this time in Ramallah in the West Bank. There they "arrested", in the media's continuing complicity in the corrupted language of occupation, the Palestinians' deputy prime minister. His "offence" is belonging to the political wing of Hamas, the party democratically elected by the Palestinian people earlier this year to run their government in defiance of Israeli wishes. Even the Israeli daily Haaretz newspaper characterised Nasser Shaer as a "relative moderate" -- the "relative" presumably a reference, in Israeli eyes, to the fact that he belongs to Hamas. Shaer had only avoided the fate of other captured Hamas cabinet ministers and legislators by hiding for the past six weeks from the army -- a fitting metaphor for the fate of a fledgling Palestinian democracy under the jackboot of Israeli oppression.

A leading legislator from the rival Fatah party, Saeb Erekat, pointed out the obvious: that the seizure of half the cabinet was making it impossible for Fatah, led by President Mahmoud Abbas, to negotiate with Hamas over joining a government of national unity. Such a coalition might offer the Palestinians a desperately needed route out of their international isolation and prepare the path for negotiations with Israel on future withdrawals from occupied Palestinian territory. Israel's interest in stifling such a government, therefore, speaks for itself. And ordinary Israelis still wonder why the Palestinians fire their makeshift rockets into Israel. Duh!

On the diplomatic front, Israel's ambassador to the UN, Dan Gillerman, rejected out of hand a peace initiative from the Arab League that it hopes to bring before the Security Council next month. The Arab League proposal follows a similar attempt at a comprehensive peace plan by the Arab states, led by Saudi Arabia, in 2002 that was also instantly brushed aside by Israel. On this occasion, Gillerman claimed there was no point in a new peace process; Israel, he said, wanted to concentrate on disarming Hizbullah under UN Resolution 1701. Presumably that means more provocative "raids", like the one on Saturday, in violation of the ceasefire.

Where does all this "defensive" Israeli activity leave us? Answer: on the verge of more war and carnage, whether inflicted on the Palestinians, on Lebanon, on Syria, on Iran, or on all of them. Iran's head of the army warned on Saturday that he was preparing for an attack by Israel. Probably a wise assumption on his part, especially as US officials were suggesting at the weekend that the UN Security Council is about to adopt sanctions that will include military force to stop Iran's assumed nuclear ambitions.

In fact, Israel looks ready to pick a fight with just about anyone in its neighbourhood whose complicity in the White House's new Middle East has not already been assured, either like Jordan and Egypt by the monthly pay cheques direct from Washington, or like Saudi Arabia and the Gulf states by the cash-guzzling pipelines bringing oil to the West. The official enemies -- those who refuse to prostrate themselves before Western oil interests and Israeli regional hegemony -- must be brought to their knees just as Iraq already has been.

What will these wars achieve? That is the hardest question to answer, because every possible outcome appears to spell catastrophe for the region, including for Israel, and ultimately for the West. If Israel received a bloody nose from a month of taking on a few thousand Hizbullah fighters on their home turf, what can the combined might of Israel and the US hope to achieve in a battleground that drags in the whole Middle East? How will Israel survive in a region torn apart by war, by a new Shiite ascendancy that makes the old colonially devised mosaic of Arab states redundant and by the consequent tectonic shifts in identity and borders?

President Bush observed at the weekend that, although it may look like Hizbullah won the war with Israel, it will take time to see who is the true victor. He may be right, but it is hard to believe that either Israel or the United States can build a missile-catching net big enough to withstand the fall-out from the looming war.

Jonathan Cook is a writer and journalist based in Nazareth, Israel. His book, "Blood and Religion: The Unmasking of the Jewish and Democratic State", is published by Pluto Press. His website is www.jkcook.net

Hyman said that "despite heroic fighting by the soldiers and commanders, especially at the company and battalion level, we all feel a certain sense of failure and missed opportunity ... At times, we were guilty of the sin of arrogance. Everyone tells about his mission, but not what he didn't do and where he went wrong."

He added: "I feel the weighty responsibility on my shoulders. I failed to prepare the infantry better for war. I did not manage to prevent burnout among professional companies and platoons. I feel no relief whatsoever in the face of the array of excuses ... At this time, it is not easy being part of the system. Part of the public, and perhaps also parts of the leadership, is expressing lack of faith in us."

Hyman has always been considered an officer who never hesitates to express his opinion vociferously, a fact that frequently aroused the ire of the military establishment. At Sunday's ceremony, too, IDF Ground Forces Commander Benny Gantz said that now is the time for the army to move forward, not express remorse.

The Lipkin-Shahak Committee held a preparatory session Sunday, at which Major General (reserves) Herzl Bodinger requested to be relieved of his duties as a committee member, for personal reasons. He was replaced by Major General (reserves) Giora Rom, likewise an air force man. Rom, a combat pilot, headed the Israel Air Force's general staff and served as Israel's military attache in Washington and director general of the Jewish Agency.

The committee is expected to accept the army's position that all testimony should fall under the confidentiality article of the Military Justice Law.

Specifically, the military source said, Israel will be forced to carry out aerial assaults on trucks traveling from Syria to Lebanon if they can be determined to contain arms shipments. Otherwise, he said, Hezbollah would renew long-range rocket attacks on Israel within a matter of months.

"If we know that a truck is carrying arms, we'll strike," he said. "There is simply no alternative."

He confirmed that the IDF was aware that such action could lead to new Katyusha attacks on communities in northern Israel.

"We presented this assessment to the government, too," he said.

The army hopes that an enforcement mechanism can be activated within a few weeks to reduce the likelihood of weapons making their way into southern Lebanon.

Despite Hezbollah's refusal to give up its arms, IDF officers believe that Resolution 1701 can be implemented, at least partially. In some parts of south Lebanon, the organization has instructed its militants not to appear in public with weapons.

IDF officers pointed with satisfaction to the fact that the new resolution places responsibility for events in southern Lebanon squarely at the feet of the Beirut government, and also creates international obligations toward Israel.

Thousands of Israeli soldiers remain in southern Lebanon. Five brigades of the regular army are deployed on the ground, though at somewhat below their full strength.

The eastern sector has been evacuated, with the exception of the Hamamis hill, near Metula. A Lebanese Army brigade has already set up headquarters near Marjayoun, in an area that was used by the Lebanese gendarmerie before the war. The IDF's Nahal Brigade controls the Taibeh area, Armored Corps Brigade 188 has the area south of Nahal, Armored Corps Brigade 7 has claimed the Maroun al-Ras area, the Golani Brigade is deployed north of Bint Jbail and the Paratroops is in control of the western sector.

If the deployment of the Lebanese Army goes according to schedule, IDF officers believe that the Israeli forces can be withdrawn to within a kilometer or two of the northern border in ten days or so.

"Their troops came and ruined the bedroom furniture. We threw out the clothes I bought for my sister's wedding because they ruined them and sacked the drawers and cupboards. They left nothing intact. Even their dogs left mess in the house."

Many Lebanese Christians, Sunni Muslims and Druze have criticised Hizbollah for touching off the war by capturing two Israeli soldiers in a cross-border raid on July 12.

But they are also furious with Israel's devastating response, which killed at least 1,100 people in Lebanon. One hundred and fifty-seven Israelis were killed in the conflict.

When Israeli troops invaded Lebanon last week and occupied the Christian villages of Marjayoun and Qlaiah -- once home to the defunct pro-Israeli South Lebanon Army militia -- they went from house to house, locals say, hammering down doors, breaking glass and trashing the contents for no reason they could fathom.

Soldiers took up positions in the neighbouring villages, entering and leaving residential areas after imposing a curfew.

BITTER

Barely a shot was fired from Qlaiah, which was occupied by Israel until 2000, at Israeli infantry that advanced from the border to Christian towns around Aug. 10. Villagers say Hizbollah did not fight from among them.

No one thought the area would come under attack, and in comparison to nearby Hizbollah strongholds where houses and shops have been completely flattened, it has not.

A few buildings in the picturesque cobbled square of Marjayoun had been hit, apparently after some shots were fired at advancing Israeli troops.

Israeli soldiers also entered Marjayoun barracks and the town hall, their tanks crumpling or flattening the cars parked outside it and leaving imprints on the tarmac.

A peek through the padlocked gate into a clinic in Qlaiah reveals white doctors' coats hanging up and a table of medical tools nearby, surrounded by broken glass and metal.

Glass litters a nearby optician's and dental clinic, where neighbours say medical equipment has been damaged.

"May God not bring them fortune," said one resident surveying the damage. "It is disgusting," agreed another.

More than anything else, the people of Marjayoun and Qlaiah are bitter about an Israeli air strike on a convoy of cars evacuating hundreds of people.

Seven people were killed in the attack. Israel said it had not given the convoy permission and thought it was linked to Hizbollah. But the U.N. peacekeeping force in southern Lebanon said Israel had given permission and had a map of its route.

"You don't kill prisoners of war under international law let alone a convoy of civilians," said Makhoul Abu Hamad of Qlaiah.

The gap between the amount of compensation that was granted - stemming from whether the persons in question were designated as belonging to "confrontation line" communities - is well known and has already prompted three petitions to the High Court of Justice on the part of owners of small and medium businesses, who have requested that the situation be rectified. A fourth petition, submitted by attorney Samuel Dahwar from the Arab village of Fassouta in Galilee, reveals the fact that no Arab communities are included on the full-compensation list even though Arab towns and villages were in the range of the Katyushas and were hit by them.

One of the plaintiffs, Raik Matar of Fassouta, is a practical engineer and graduate of the Technion - Israel Institute of Technology in Haifa. He provides planning services and carries out construction work and repairs. During the war, he was unable to continue with his job both because the government offices he works with were closed, and because the incessant shelling on the part of the Israel Defense Forces' artillery batteries, stationed at the outskirts of his village, made life unbearable. The construction work that he had begun on the eve of the war - in Hurfeish, Kfar Vradim and Arab al-Aramshe - had to be stopped, on the instruction of the Home Front Command, because the residents of these places, like those of Fassouta itself, were not allowed out of the protected areas.

Matar estimates his losses during the month of the war to be some NIS 19,000: He should have earned NIS 15,000, and the remainder would have been ongoing expenses that are automatically deducted from his account (various insurance plans, regular office expenses, etc.). Had his office been situated at Moshav Alkosh rather than Fassouta, attorney Dahwar says, "the state would have remitted the entire sum to him."

Alkosh is no closer to the confrontation line - it lies five kilometers south of Fassouta - but nevertheless the owner of a similar office there would have received the entire sum he had lost, while Matar can expect be left, after paying salaries to his workers, with only NIS 6,500.

Another petitioner, Suleiman Halek, owns a pizzeria in Fassouta and he also lost tens of thousands of shekels during the war. This is a flourishing pizzeria that was opened in 1997 and has since become a central place of entertainment for the youth of the village. "I estimate that before the war, at least half of the youth and children living in the village would come in here every day," he says. Halek's delivery service reached almost every house in the village and the neighboring villages.

During the war, Halek closed the pizzeria, according to Home Front Command instructions, which did not exempt him from paying his ongoing expenses, amounting to some NIS 5,000 per month. His turnover last year amounted to about NIS 35,000 per month. Had he employed workers, his situation would have been even worse than that of Matar. Since the pizzeria is a family business, however, his compensation will be estimated on the basis of his income last year. He will not be recompensed for his ongoing expenses or for damages such as spoiled food products. Had his pizzeria been in Ma'alot, he would have received full compensation from the state, both for the lack of income and for the expenses and damages.

Rational explanations

The root of this problem is the fact that an official declaration of a state of war was never made, which left in place laws and regulations that create two categories of victims, receiving compensation according to different rules and of differing sums. One group, whose existence was recognized by arrangements existing long before this war broke out, are those who have businesses in communities described as being on the so-called confrontation or front line. According to law, the state must compensate these businessmen fully during a time of hostilities, including for loss of income and regular expenses that they incur even when their business is not open. The list of front-line businesses, which is determined and updated by the finance minister, consists mainly of communities that are situated close to the border with Lebanon and as far away as 10 kilometers from it: in other words, the area that was already exposed in the 1970s to the short-range Katyusha rockets.

The second group, which is much larger than the first, consists of all those persons whose businesses are situated in what was defined during the war as "areas of limitation" - that is, places south of the confrontation line, which were exposed for the first time to the Katyushas. The vast majority of the 90,000 business owners in the North fall into this category and they will be recompensed according to new criteria that were drawn up in an agreement signed after the war started between the treasury, the Histadrut labor federation and the employers.

According to these regulations, the state will pay the full salaries of workers employed by these businesses and the remaining compensation will be fixed according to the expenditures for wages - not according to the permanent expenses they have to bear, the damages that were caused or the loss of income. The government will give them 132.5 percent of the wages they pay to their workers and since the business owners are obliged to pay the salaries in full, the sum left in their hands will be 23.5 percent. Businesses that do not have a lot of salaried workers - and many of the enterprises in the Arab sector are in that category - will receive a symbolic sum.

One may have thought the list of front-line businesses was out of date, but from the documents attached to the petition, it transpires that Finance Minister Abraham Hirchson took the trouble of updating it during the war, when the range of the new Katyusha rockets was known. Left off the list were at least four Arab communities that were hit by them. A missile that fell in Arab al-Aramshe took the lives of two people, one that fell in Fassouta destroyed a house and injured one of its occupants, and others that fell in Ma'ilia and Jish (Gush Halav) caused damage to property. Leaving these four communities off the list did not keep Hirchson from adding five Jewish communities, during the war, to the list: Eliad, Degania Bet, Har Odem, Kabri and Safsufa - all located south of the Arab communities that were left off the list.

The matter in question is one of "blatant discrimination on a national basis," Dahwar wrote in his petition, in which he requests that the High Court order inclusion of Arab communities in the list of confrontation-line settlements. "Businesses in the Arab villages close to the border with Lebanon will get less compensation simply because they are Arab."

Dahwar examined the names on the list and found that the only non-Jewish communities included are the largely Druze Pek'in and Hurfeish, and Rehaniya, which is Circassian. He also found that Ma'ilia was not included on the list even though Kibbutz Yehiam and the moshavim Me'ona and Ein Yaakov, located even further from the border, were included and that Jish is not included even though Dalton and Safsufa, also further from the border, are listed.

"Before I presented the petition," Dahwar says, "I tried to find other reasons besides discrimination against Arabs that could cause a rational being like the finance minister to make such a miserable and irrational decision. I could not find them. The instructions that the Home Front Command gave in Fassouta and Ma'ilia were the exact same instructions as they gave in Ma'alot or Alkosh. The damages caused to businesses are the same damages. So what explanation can there be other than racial discrimination?"

On August 8, the attorney sent a letter asking that the finance minister correct these distortions. He submitted the petition only five days later, after he did not hear from the ministry. Treasury officials this week refused to explain to Haaretz why Hirchson had decided to leave the Arab villages off the list that he had updated.

"A petition on the matter has been presented to the High Court of Justice," the spokesman's office replied, "and we'll explain our position to the justices."

Attorney Dahwar, who lives in Fassouta, is also an accountant and he submitted the petition in his own name and in that of four businessmen from Fassouta and Ma'ilia whose accounts his office audits. Dahwar's office is situated in the village of Tarshiha, which because it belongs to the joint Ma'alot-Tarshiha municipality, is actually included among the front-line communities. He himself will be eligible for full compensation, but in the petition Dahwar explains that he too will be affected since the businesses of most of his clients are in Ma'ilia and Fassouta and they will therefore receive much less compensation.

This is not the first time that Dahwar is fighting to have Fassouta, Ma'ilia, Jish and Arab al-Aramshe put on this list. He raised the issue already in 1996, at the end of the Grapes of Wrath campaign, during several radio interviews. The then-finance minister, Abraham Shochat, acted swiftly to remove the issue from the public agenda.

"The finance minister proposed to us then to receive compensation as if we were on the list, but without being included on the list and without this constituting a precedent," Dahwar explains. "At that time, I agreed to the arrangement because I wanted my clients to get the compensation that was coming to them. I won't agree again since it can't be that after every military operation, we will have to fight again for our rights."

This time Dahwar hopes that the High Court of Justice will put an end, once and for all, to what he sees as outright discrimination.