The quiet prevailing on the Lebanese border is deceptive.The calm hides the regional arms race between the IDF and its arch-enemy Hezbollah.Ten years after the Second Lebanon War, the IDF is in the midst of transforming and improving itself. So too is the Shi’ite army.Today Hezbollah can no longer be described as a terrorist organization. Rather it has evolved into an organized, hierarchic army.Armed with some 120,000 surface-to-surface rockets and missiles, its firepower eclipses that of most states in the world. Dozens of its projectiles are long-range, and accurate. Hezbollah possesses hundreds of drones that it uses in combat against Syrian Sunni rebels.In the 20th century, Syrian military formations were parked in Lebanon, projecting Damascus’s power on its weaker neighbor. Today, the situation is reversed, and it is Lebanese Hezbollah formations that are shaping events next-door in Syria – a sign of Hezbollah’s new role as a regional Shi’ite power.Hezbollah chief Hassan Nasrallah is attempting to achieve three goals simultaneously: maintaining stability in Lebanon, fighting a sectarian and costly war in Syria, and ensuring that his hybrid guerrilla army is prepared for the next time it faces the IDF.Seventy percent of Hezbollah’s billion-dollar annual budget comes from Iran, and it uses this money to build command-and-control and rocket-launch sites all over villages and towns in southern Lebanon. But Hezbollah has also invested in military infrastructure in northern Lebanon, spreading out its firepower across the country.Hezbollah today is focused on acquiring accurate, guided projectiles, and seeks to import as many of these as it can, from both Iranian and Syrian weapons factories.According to international media reports, Israel is engaged in covert actions to stop this weapons trafficking.On the ground, Hezbollah maintains between 40,000 and 45,000 armed members divided evenly between conscripts and reservists. It has lost more than 1,300 fighters in Syria, and suffered some 5,500 wounded, placing the southern Lebanese Shi’ite community, from where it recruits, under great strain.Intelligence and Transportation Minister Israel Katz described Nasrallah on Thursday as a “fanatical personality who has lost all of his realistic appraisal [capacity], other than perhaps considerations for his own personal security.A war in Lebanon and attacks on the Israeli home front will lead to Nasrallah’s departure, and will bring destruction to Lebanon.”Yet Nasrallah may be more calculated than Katz has described. For a decade he has avoided opening a new front with Israel while retaining the “right” to retaliate against what he perceives as Israeli attacks on Hezbollah targets, whether in Syria or Lebanon.Israel cannot ignore Nasrallah’s policy of “equilibrium,” which calls for retaliation against every perceived Israeli strike. This friction largely occurs away from the public eye and out of the sight of everyone except the few who are involved in this covert struggle.A miscalculation in this high-risk game could spark an unintended conflict, a third Lebanon War, more destructive than any before it, even if neither side desires conflict at this stage. Such a war could see thousands of Hezbollah projectiles fired into Israel every day, and Israel directing much greater firepower back at targets in Lebanon. The result would trigger a refugee crisis there, and render Lebanon a failed state.Within Lebanon, Hezbollah has become a political party controlling a third of the parliament in Beirut. Paradoxically, its increased involvement with the Lebanese state makes it more accountable – and vulnerable.Any future disastrous military adventure could drag in Israel, and leave Lebanon in ruins. That would also leave Hezbollah’s legitimacy as “Lebanon’s protector” in tatters.Such a development would topple the crutch of Hezbollah that the Assad regime and Iran lean on in Syria, and would have regional implications for the Sunni-Shi’ite war raging across the entire Middle East. It has the potential of tilting the balance firmly in favor of Sunni regional powers and their proxies.Hezbollah’s current form comes after several phases of “evolution.”After Israel withdrew from the Security Zone in southern Lebanon in 2000, Hezbollah set up a series of posts on the border, complete with armed personnel and flags. It then kidnapped three IDF soldiers in 2000, after declaring the Shaba Farms (Mount Dov) area as a base for guerrilla attacks on Israel.The situation changed radically after the Second Lebanon War of 2006.After that conflict, no Hezbollah posts remained on the border, but the organization is very much present there today, arming itself, constructing bunkers, and keeping a vigil on Israel.For most of the past decade, quiet has reigned. But IDF commanders caution their subordinates not to be taken in by the tranquility.On Thursday, Brig.-Gen. Amir Baram, commander of the Galilee Formation, also known as the 91st Division, spoke at a ceremony to honor a new commander taking over Brigade 300 that guards the North.“There is relative quiet in this sector, when viewed from the perspective of onlookers on the site, [but] it must not mislead us,” Baram cautioned.“The intention of our enemies over the fence has not changed. On the day we will be tested, we will be required to lead. This could mean responsible civilian leadership among local council heads, or military leadership to enable us to take determined action in a complicated reality of war.”A decade after the Second Lebanon War, Hezbollah has much to lose by going to war with Israel again. It spent huge sums in the aftermath of the 2006 war rebuilding the Lebanese civilian sector, describing this as a “jihad of reconstruction.” Every family whose home was damaged in 2006 received reconstruction compensation. It took Hezbollah five years to rebuild its southern Beirut stronghold of Dahiya that was battered by Israeli air strikes.Then came Hezbollah’s military recovery. Hezbollah concluded that it needed a bigger arsenal of rockets, and that it should spread out rocket launchers across all of Lebanon. Now, Hezbollah is investing in improving the quality of its rockets, with Iranian and Syrian assistance.Since March 2011, Hezbollah has gradually sunk deeper into the quagmire of Syria’s civil war. The fight to keep the Assad regime alive has been costly, but also enabled Hezbollah to study and learn battle techniques that it could deploy against Israel.Nasrallah today finds himself in the position of having to try and extinguish many unforeseen fires. He did not foresee in 2006 that his primary enemy in 2016 would be Islamic State, not Israel. Nor could he have guessed that Hezbollah would be facing a cash crisis due to sanctions placed on him by the Lebanese banking system (in response to US demands).Hezbollah’s resources are being drained by rehabilitation programs for wounded Syria veterans and pensions.The money Hezbollah earns dealing in narcotics is not enough to stem the cash hemorrhage.Today, Hezbollah may be more capable of attacking strategic facilities in Israel with guided rockets than ever before, but it also has more regional challenges than it ever did. It could take battle- hardened units from Syria and use them to carry out raids into the Galilee. But doing so, it would find itself fighting a two-front war, and losing both Syria and Lebanon in the process.Hezbollah has embedded all of its offensive capabilities in civilian areas. Those civilians could turn against it if Hezbollah compels Israel to turn its firepower and ground forces on Lebanon.Perhaps most important, Hezbollah is aware that the IDF is studying it closely, and making its own improvements, having placed war readiness at the very top of its agenda.Hezbollah may encounter an IDF that is prepared for the maneuvers it is planning for the next war.