More than a month after the elections, the process of forming a new government in Lebanon has reached an impasse leading to renewed anxiety in the Middle East as well as in the world at large. Prime minister-designate Sa'ad Hariri, son of slain former prime minister Rafik Hariri, appears to be sinking rapidly in the proverbial Lebanese mud. After a number of meetings with the leaders of all the parties - coalition and opposition, including Hizbullah's Hassan Nasrallah - he is no closer to achieving his goal. Despite predictions to the contrary, the coalition led by Hariri increased its majority in the elections; it now musters 71 representatives in the parliament while the opposition has 57. This came as a shock to Hizbullah, which had had high hopes of winning power through democratic means. Theoretically, a government could have been set up within days. But this is Lebanon, a country divided along religious and ethnic lines where Hizbullah is backed by powerful allies such as Iran and Syria. Hariri and his fellow politicians of the March 14 movement - so called after the date of the Cedar Revolution - mass demonstration staged by the majority parties in 2005 after the assassination of Rafik Hariri - are only too well aware of the fact that to bring the country the conciliation needed to tackle its severe economic problems they must include opposition parties in their government. And that means Hizbullah, the de facto leader of the opposition. Such a move would pacify Syria and Iran. Immediately after being asked to form the new government, Hariri therefore declared that he wanted "a national unity government." Having lost its bid to gain power through democratic means, the opposition is ready to come in but under its own terms: it demands a third of the cabinet ministers, 10 out of 30 - something the coalition could live with - but with veto on all important government decisions. This is what Hizbullah had obtained in the previous government following the Doha agreement in May 2008 which put an end to months of strife. What is at stake here is Hizbullah status as a state within a state, with its own armed militia, in defiance of a number of accords within Lebanon (such as the 1989 Taif agreement) and Security Council Resolutions 1559 and 1701, which put an end to the Second Lebanon War. Hizbullah wants at all cost to remain free to act as it sees fit, first and foremost concerning the flow of arms smuggled to the organization from Syria, and to be able to control any decision regarding Israel such as the fate of the so called "Shaba Farms," or Mount Dov. The recently released UN report on Resolution 1701 emphasized the nonimplementation of the dispositions concerning the weapons held by Hizbullah and the continuation of smuggling through the porous Syrian-Lebanese border. Saudi Arabia and Egypt, which lead the pragmatic Arab camp, have been trying to persuade Syria to pressure Hizbullah to accept a compromise. This is a new phenomenon. Relations between Riyadh and Cairo on the one hand, and Damascus on the other, had been tense since the assassination of Rafik Hariri, often blamed on Syrian President Bashar Assad; they worsened when it was discovered in November 2008 that Hizbullah had set up a terror cell in Egypt. However, a common preoccupation with Lebanon led Saudi King Abdullah and Egyptian President Mubarak to reassess their position. They met twice, first in Jeddah and the following day in Sharm a-Sheikh; one of the king's sons was dispatched to Damascus for talks with Assad. This past Tuesday, an Egyptian delegation went to Syria, ostensibly to further reconciliation talks between Fatah and Hamas (whose leaders reside in Damascus) and the liberation of St.-Sgt. Gilad Schalit, but also to discuss the situation in Lebanon. Rumors were also rife about a meeting between Assad and Hariri, perhaps in the course of a summit meeting in Damascus, with the participation of the Saudi king and the Lebanese president, to resolve all outstanding issues and pave the way for the formation of a new Lebanese government. However, some of Hariri's allies - the leaders of the Christian parties and a number of prominent Sunni politicians - condemned the scheme and stated that Hariri would not go to Damascus until a government was formed, adding that it was in Lebanon, and not in Syria, that the decisions would be taken in accordance to Lebanese interests. If Hariri had indeed intended to go to Damascus, he shelved the idea - at least temporarily. According to a renewed spate of rumors, the summit will be held next week, but without Hariri, who will only travel to Syria after the formation of the government. He is probably not too keen to meet with Assad, who allegedly had his father killed, but after all he already met with Nasrallah, whose organization purportedly carried out the deed. Incidentally, according to reports in the Lebanese press Nasrallah himself made a surprise and highly secret trip to see his patron Assad in Damascus. The United States and France are also doing all they can to bring Syria to pressure Hizbullah into a more conciliatory position. In fact, since Barack Obama was elected, talk about the "axis of evil" has not been heard concerning Syria; a number of congressional delegations have visited Damascus, and there was also a US military delegation. George Mitchell was there last week and it seems that Washington is getting ready to send a new ambassador to Syria (the last one was recalled following the assassination of Rafik Hariri). So far Syria, basking in all that international attention, has given no indication that it is ready to act... In what must have been a very busy week, there was also a visitor from France: Claude GuÃ©ant, general secretary of the President's Office and a close confident of Nicolas Sarkozy. This week Foreign Minister Bernard Kouchner will be in Damascus, where the annual meeting of French ambassadors to the Middle East will be held. This will not be his first visit to the country; he was there a number of times. President Sarkozy himself hosted Assad in Paris last year. Israel is closely monitoring the developments. Prime Minister Netanyahu has stated clearly that in the event that Hizbullah were included in the next Lebanese government, Lebanon would be held responsible in case of an attack against Israel by the organization. There are problems within the coalition as well. While Christian parties and Hariri's Sunni block vehemently oppose giving Hizbullah veto power, veteran Druse leader Walid Jumblatt, head of the Progressive Socialist Party, has held a meeting with Nasrallah and appears more receptive to his demands. His position is that one must take in account the fact that Shi'ites are the largest ethnic group in Lebanon. A few days ago a delegation of Hizbullah religious leaders paid a ceremonial visit to Druse religions leaders; according to media reports, they agreed to a sulha reconciliation, after the bloody clashes between Hizbullah militants and the Druse militia in West Beirut in May. Having won a clear and undisputed victory in democratic elections, Sa'ad Hariri is still seeking a way to form the government Lebanon desperately needs to tackle the economic crisis and to bring some form of reconciliation between all Lebanese. So far Egypt, Saudi Arabia, the United States and France have tried to help but with little result. Syria, Iran and Hizbullah show no sign of being ready to move one inch from their intransigent stands. So what is going to happen? It may very well be that the parties that won the elections, and enjoy the support of the West and of moderate Arab states, will have to give in. Syria and Iran would then be able to claim another victory which would go a long way towards reinforcing their position in the Middle East. But if the coalition decides to stand its ground, there may very well be another round of bloody fighting in Lebanon. The writer, a former ambassador to Egypt, is a fellow of The Jerusalem Center for Public Affairs and editor of infoelarab.org.