Shin Bet security service chief Yuval Diskin is so worried about Israel's deterrence that he made his concerns public last month. Speaking to the Knesset Foreign Affairs and Defense Committee, Diskin said Israeli deterrence had "suffered substantially" due to three events over the past three years: the disengagement from Gaza, HamasÂ¹s subsequent takeover of the Strip, and the Second Lebanon War. Diskin did not elaborate, but his reasons for citing these events were obvious: All undermined both the physical and the psychological aspect of deterrence. Physical deterrence relates to the actual balance of forces: The greater the imbalance, the more reluctant the weaker side will be to start hostilities. And while the balance clearly still favors Israel, the gap has shrunk markedly thanks to the events Diskin cited. UNTIL ISRAEL quit Gaza in 2005, it combated Palestinian arms smuggling with substantial (though never complete) success. But once it withdrew, the floodgates opened. Thus pre-disengagement, most Hamas rockets had ranges of only a few kilometers, and its stockpile never exceeded a few hundred. Today, Israeli intelligence believes the organization has thousands of rockets capable of reaching major cities in southern Israel, on top of thousands of shorter-range rockets. It has also acquired sophisticated anti-tank rockets Â the weapon responsible for most IDF casualties during the Second Lebanon War Â and built a network of Hizbullah-style bunkers. Thus should Israel respond to any future Hamas attack, it will risk withering rocket fire on its cities, while any ground operation aimed at stopping the rockets will entail many more casualties than did previous Gaza operations. That knowledge will make any Israeli government more reluctant to respond, which in turn will make Hamas feel freer to strike when it deems the time convenient. The same goes for Lebanon. The government touted Security Council Resolution 1701, which ended the 2006 Lebanon war, as an achievement, saying its provisions for a beefed-up UN force and the Lebanese ArmyÂ¹s deployment in south Lebanon would prevent HizbullahÂ¹s rearmament. Instead, 1701 allowed Hizbullah to rearm at breathtaking speed. The organization now has some 40,000 rockets Â triple its arsenal in 2006. Moreover, these include long-range rockets capable of striking anywhere in Israel, whereas in 2006, only the north was in range. Furthermore, thanks to both its arms-buying spree and the image boost it received from the IDFÂ¹s failure to defeat it (a feat no regular Arab army ever matched), Hizbullah now controls the Lebanese government so totally that new government guidelines approved last week formally authorize it to attack Israel whenever it wishes. This governmental approval may well grant it access to Lebanese Army materiel, which includes highly sophisticated American equipment Â especially since LebanonÂ¹s new president and former army chief, Michel Suleiman, announced last Friday that he supports "all means" to regain what he terms occupied Lebanese land. Thus again, should Israel respond to any future Hizbullah aggression, Hizbullah will be able to exact a far greater price than it did last time. That will make Israel think twice about responding, which in turn will make Hizbullah feel freer to attack. BUT FOR all the importance of the physical element, deterrence is primarily about psychology: Perceptions of a foe's strength often matter more than reality in deciding whether to attack. And on the psychological plane, the events Diskin cited were devastating. According to repeated polls, 70 to 85 percent of Palestinians believe that Israel quit Gaza due to anti-Israel terror. And with reason: In 2000, no Israeli government would have considered withdrawing from Gaza unilaterally. Yet a relatively low casualty level Â Gaza-based terror accounted for less than 15 percent (some 150 people) of IsraelÂ¹s intifada-related fatalities over the ensuing five years Â sufficed to reverse this stance. Thus, clearly, terror worked. Sheikh Hassan Yousef, who is widely regarded as HamasÂ¹s leader in the West Bank, explained the thought process in an astonishingly frank interview in last Friday's Ha'aretz. He himself, the interview implies, was unenthusiastic about suicide bombings. Yet Israel's own actions proved the tactic so effective that its opponents within the organization were effectively silenced. "Members of the Israeli ÂŒpeace camp, those who spoke about ending the occupation and withdrawing, pushed us forward in our decision to continue the suicide attacks," he said. "The cracks in your steadfastness encouraged us greatly and proved that this method is very effective. Ariel Sharon's plan for disengagement from the Gaza Strip was also a great achievement that resulted from our activities. For us, one of the best proofs of the rift that suicide attacks had created in Israeli society was the phenomenon of refusal to serve in the army. We thought this rift should be deepened, and use of the suicide bomber weapon became a matter of consensus in our organization." In short, many Palestinians concluded that Israel was simply too weak to stand up to terror. Hamas's takeover of Gaza two years later compounded the impression of Israeli weakness, because for years, Israel had openly backed Fatah against Hamas Â both verbally and, to some extent, in deeds. And when your proclaimed ally is ignominiously routed by your enemy, that inevitably reflects on you as well. But the Second Lebanon War was the ultimate proof: After 33 days, the IDF proved unable to defeat a much smaller and more poorly equipped foe. And precisely because Hizbullah was obviously militarily inferior, the only possible explanation for its achievement lay in Israel's unwillingness to fight: For fear of taking military casualties, Israel refused to launch the necessary ground operation against Hizbullah, preferring to let a million Israelis cower helplessly under daily rocket barrages. The conclusion is obvious: Israel is afraid to confront Hizbullah head-on. And therefore, Hizbullah need not fear attacking it again. One might argue that all of the above is water under the bridge: It happened, and Israel is stuck with the consequences. Yet the fact that the government has continued making all the same mistakes in the ensuing years (as next week's column will show) proves that the lessons remain unlearned. And until they are learned, whatever shreds of Israel's deterrence remain will continue to evaporate.