Lebanon festive for now, but tough issues ahead

BEIRUT, Lebanon (AP) -- Businessman George Jabra isn't certain the stability Lebanon has enjoyed for more than six months is going to last. Still, he took a chance and opened up a new restaurant on a Beirut hilltop, betting on the revival of good times sweeping the country once known as the Paris of the Middle East.

The Lebanese capital is hopping this holiday season, riding a wave of prosperity and relief over an unusually long period of calm. It follows a stretch of turmoil since 2005 that included a devastating war between Israel and the militant group Hezbollah, a series of assassinations and an interminable political crisis that culminated in May with bloody street battles nearly pushing the country into civil war.

But the festive mood is tinged with the knowledge that events in the new year could very well break the fragile respite. In particular, parliamentary elections due in late May or early June, threaten to respark the power struggle between Lebanese factions allied to the United States and those allied to Syria and Iran.

"Today, there is peace," Jabra said. "Tomorrow, there could be war again."

Nevertheless, he opened his restaurant - named Olivia's, after his eldest daughter - in mid-December.

Why take the risk?

"That's who we are. Lebanese always keep building again," Jabra said.

He's not the only one taking advantage of the boom in this country of 4 million people.

Construction cranes dot Beirut's Mediterranean skyline. Planes are full of expatriate Lebanese coming home for Christmas and New Year's, as well as foreign tourists. The number of arrivals at Beirut's international airport is expected to reach 1.3 million at year's end - a figure not achieved since 2004.

Downtown Beirut is choked with traffic jams, and shops and boutiques are full of customers. Tourists pack restaurants and street cafes to enjoy Lebanon's famed cuisine and smoke fragrant waterpipes. Central Martyr's Square now has a giant Christmas tree next to the city's biggest mosque, and luxury hotels are planning New Year's parties at New York and Paris prices - up to $1,500 a plate.

Even the global economic crisis has bypassed the nation for now - thanks to conservative bank regulations long in place that prevented the sort of risky transactions that have undone other countries' institutions, Lebanese financial officials say. Banks have been flooded with cash from depositors looking for a safe haven.

The period of stability began after a political deal was reached following May street battles in Beirut between supporters of the pro-Western government and Hezbollah, which is backed by Iran and Syria. The fighting killed 81 people and raised fears Lebanon was about to be torn apart like it was during the bitter 1975-1990 civil war.

Under the agreement, Hezbollah, which the United States labels a terror group, and its opposition allies won a strong say in decision-making in a new national unity government.

Many Lebanese believe the truce is holding because the nations that back each faction - Saudi Arabia and the U.S. on the pro-Western side, Iran and Syria on Hezbollah's - backed off and didn't want to risk the country drowning in all-out sectarian conflict.

The upcoming elections, however, could shatter the unity government because a fierce contest is expected between a Hezbollah-led coalition and Western-backed anti-Syrian factions that currently hold the majority in the 128-member parliament.

"People want the truce to last, but the question is whether the factions realize this," said Rami Khouri, who heads an international affairs institute at the American University of Beirut.

"Politics has unfortunately always trumped economics in Lebanon," Khouri said. "If economic prosperity could stimulate political reconciliation, it could keep Lebanon calm."

Another critical event looms even before the elections.

An international tribunal is to begin operating March 1 to prosecute suspects in the 2005 assassination of former prime minister Rafik Hariri and 22 others, which many in Lebanon blame on Syria. No one has been charged yet, but four pro-Syrian Lebanese generals have been under arrest for more than three years.

Syria, which dominated Lebanon for 29 years until it was forced to withdraw its troops after Hariri's slaying, denies involvement. But if the court begins pointing fingers toward Damascus, Syria could stir up trouble in Lebanon.

In a glitzy mall in Beirut's Ashrafieh neighborhood, shoppers were soaking up the holiday cheer - but were well aware how many ways there are for things to fall apart.

"Everything is interconnected here in the Middle East," said retiree George Moujaes, 79, as he herded around seven grandchildren, all visiting from abroad. "So much depends what happens with Iran, Syria. ... I hope for peace but I am not optimistic."

Engineer Bashir Khoury, 34, visiting from abroad, says he's happy to enjoy Lebanon but wouldn't risk coming home for good.

"People my age, we don't trust the government. I come to spend my money, have fun, see my parents. Then I go back," said Khoury, who lives in Haiti.

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