It is being dubbed the "largest" military exercise in Hizbullah history. Thousands of guerrillas from infantry, anti-tank and anti-aircraft units are reported to have participated in the three days of maneuvers in southern Lebanon, right under the noses of UNIFIL and the Lebanese Armed Forces. During the exercise, Hizbullah also activated the unit responsible for firing its short- and long-range missiles, which the terror group boasted have a proven ability "to strike any point in the territory of Palestine." This all happened last weekend, only days after UN Secretary-General Ban Ki-Moon published another report on the continued implementation of Security Council Resolution 1701, in which he revealed IDF claims that Hizbullah had replenished its long-range, Iranian-made missile arsenal, and had even tripled the number of Chinese-made C-802 shore-to-sea missiles in its stock. The sequence of events is striking: Just days after Israel warns the world of the growing threat in Lebanon, Hizbullah holds its largest military exercise ever with the purpose - the group's number two, Sheikh Naim Kassem, declared on Lebanese TV - of showing that "Hizbullah must be ready and prepared, so it won't be taken by surprise." The Israeli response was quick to come. On Tuesday, Brig.-Gen. Yossi Baidatz, head of Military Intelligence's Research Division, told the Knesset Foreign Affairs and Defense Committee that the exercise was carried out "firstly, to show [Hizbullah] is not intimidated by IDF exercises, and secondly, to display its power as an internal message to Lebanon." News of Hizbullah's rehabilitation is not original. Since the Second Lebanon War, Military Intelligence and Northern Command officers have warned that Hizbullah is rebuilding itself, sometimes receiving daily shipments of advanced weaponry - including Katyusha rockets and anti-tank missiles - from Syria. The group has rebuilt its underground fortifications north of the Litani River - outside of UN detection, but in range of Israel - and has even established its own wireless phone network throughout southern Lebanon. The assessment in the Israeli defense establishment has always been that any Iranian military platform or missile small enough to fit into a shipping container should be assumed to be in Hizbullah hands. REPORTS OF the exercise come at a sensitive time for Israel, which is working to ensure that European countries continue contributing troops to UNIFIL. Despite the peacekeeping force's failure to stop Hizbullah's rearmament or even the exercise, Israel still prefers there be a strong force - made up mostly of European soldiers - in Lebanon. The concern over UNIFIL's fate is genuine, with its commander, Maj.-Gen. Claudio Graziano, reportedly recently warning that the tension in southern Lebanon and the deepening political crisis in the country might prompt European countries to withdraw from UNIFIL. But for some Israeli military experts, the recent exercise is an indication that it is time to begin reconsidering options vis-Ã -vis Hizbullah, including the possibility of launching preemptive military action to stop it from continuing to gain strength. "Israel needs to respond to the Hizbullah exercise," a former general who commanded troops during last summer's war said this week. "We cannot allow ourselves to live in a state of denial, because if we do, the results will be catastrophic." One such option, floated immediately after the war, is to bomb the weapon convoys that cross into Lebanon from Syria. For a number of reasons, including fear of another war, the political echelon decided after the month-long war not to adopt that course of action. Instead, the IDF uses high-quality surveillance equipment and intelligence-gathering aircraft to follow the shipments as they cross into Lebanon until they reach their destination. "The exercise is not the issue," Maj.-Gen. (res.) Eyal Ben-Reuven said. "The real issue is that [Hizbullah leader Sheikh Hassan] Nasrallah is telling us that he is still here, that he is significantly stronger and that no one can stop him." Deputy commander of the Northern Command during the Second Lebanon War, Ben-Reuven said that Israel needs to make it clear to the Lebanese government that it will pay a heavy price if it continues allowing Hizbullah to build up militarily. "I do not recommend going to war today," he said. "But I do recommend sending clear messages to the Lebanese government that it is responsible for what happens, and that if diplomacy does not work, then it will pay the price." But the bigger problem, Ben-Reuven said, is that by holding the exercise just days after the IDF held its own massive exercise in the North, Hizbullah is trying to restore the "balance of deterrence" that it had fostered over six years, from the unilateral withdrawal in 2000 until the Second Lebanon War. After the withdrawal, which Hizbullah credits to its terror activity, Israel rarely responded militarily to its continued provocations. One example was the kidnapping of the three soldiers from Mount Dov in October 2000. IDF officers urged prime minister Ehud Barak to respond with force. He preferred restraint. SO WHAT will Israel do? While the sense in the IDF is that the government will not want to initiate another war, the question of whether it is considering such a war is being asked. Maj.-Gen. Moshe Kaplinsky, who left his job as deputy chief of staff two months ago, said recently that a preemptive strike against Hizbullah was possible if other measures did not succeed in curbing it. "If nothing changes in the situation in Lebanon, somebody will have to change the situation," Kaplinsky said at an event hosted by the Washington Institute for Near East Policy. "I include preemptive strikes." At the moment, however, Israel has its hands full with other pressing issues. In a few weeks Prime Minister Ehud Olmert is supposed to travel to Annapolis for a peace summit with Palestinian Authority Chairman Mahmoud Abbas. Upon his return, he will no longer have an excuse for pushing off what the IDF calls "the inevitable large-scale operation" in Gaza. Israel will not want to fight on two fronts simultaneously. It is safe to assume that no one in Israel really wants to get sucked back into the Lebanese quagmire. But the alternative of sitting on the border and waiting for the inevitable might not be that much better.