The Security Cabinet is expected to discuss on Wednesday the ramifications of a Lebanese cabinet policy statement giving Hizbullah the right of "resistance" to "liberate Lebanese territories." "This creates a new reality," one Israeli diplomatic official said of the statement, which was approved Monday. "With the smuggling of arms into Lebanon from Syria, Iran's involvement, and the fact that Hizbullah is now a part of the Lebanese government, there is a need to discuss the situation and formulate policy." Defense Minister Ehud Barak has said in recent weeks that UN Security Resolution 1701, which put an end to the Second Lebanon War, was a failure because it did not stop the arms transfers from Syria to Hizbullah. Wednesday's meeting is a continuation of a Security Cabinet meeting held in early July, where the ministers were briefed by security and intelligence officials on the situation in Lebanon. The ministers were told at the time that there were some 2,500 non-uniformed Hizbullah men in southern Lebanon, and that the organization had trebled its pre-war military arsenal and now had some 40,000 short and medium-range missiles inside Lebanon. However, Wednesday's Security Cabinet meeting is expected to discuss not only the arms, but also the changing situation vis-Ã¡-vis Lebanon as a result of the approval of the policy statement, which says it is "the right of Lebanon's people, the army and the resistance to liberate all its territories." The approval of this statement came after Lebanese political factions reached a compromise on Friday by releasing a vaguely worded draft statement implying Hizbullah could keep its weapons. Diplomatic officials in Israel said these Lebanese government decisions would mean that the Lebanese government could be held accountable if Hizbullah carried out provocations against Israel. Lebanese Information Minister Tarek Mitri said some ministers in the majority had had reservations on the paragraph indicating Hizbullah could keep its weapons, but in the end, all ministers had voted in favor of the statement. According to Mitri, some anti-Syrian ministers had wanted to add "under the state's supervision" to the statement, but were not successful. The parliament will now discuss the policy statement before giving Prime Minister Fuad Saniora's 30-member national unity government an expected vote of confidence. The parliament meeting is expected later this week. AP contributed to this report.