What is the impact of the Lebanon war on the Arab world? A good way to analyze this incredibly important question is to focus on Israeli deterrence - Jerusalem's ability to prevent a war by persuading the enemy that an attack is too costly. In direct terms, it has actually been enhanced. When the governments of Saudi Arabia, Egypt, Jordan and others look at the crisis, they focus on the high cost to Lebanon. It is clear to them that getting into a war with Israel would be disastrous, and they are aware that Israel restrained itself in this case. The chance of their attacking has declined, though it was low anyway. What they fear is getting dragged into a war by radical Islamists. But in indirect terms, Israel's deterrence power has fallen, though perhaps by less than it seems. There are two such "indirect ways," both of which were central to the fighting in Lebanon: covert sponsorship of terrorism and attacking Israel from someone else's territory. THE IDEA of a regime assaulting Israel via another country is not a new one. Egypt and Syria used Jordan and Lebanon for this purpose from the late 1960s onward. The whole history of the PLO (and more than a dozen Palestinian terrorist groups) is based on the principle of state sponsorship. Events in Lebanon have taken this concept to a new level: the sponsorship of what might be called a well-armed semi-army against Israel. This kind of technique can also be applied to the Palestinians, and that is the most important potential development of all. Consequently, the number one danger to Israeli security emerging from this crisis has nothing to do with Lebanon, but would be the large-scale arming of Hamas by Iran and Syria with rockets, advanced anti-tank weapons and high-quality explosives. There is a real chance that the northern front could be quiet for some years, but no chance at all for a similar development on the Palestinian southern or eastern fronts. IT IS important to note that the Syrians and Iranians were able to engage in one of the biggest terrorism-sponsorship events in history, at no cost whatsoever - a point that will surely not escape the attention of those countries' leaders. Not only did they avoid any direct material damage to their countries, there was no serious international criticism or call for sanctions. Those with a macabre sense of humor might note that paragraph 15 of the UN cease-fire resolution calls on member countries - including Syria and Iran - to ensure that arms are not smuggled into Lebanon. Does anybody believe anything will be done when Syria and Iran inevitably break that provision? Will such a violation even be reported, much less punished? On the public relations front, Israel came in for far more condemnation than Teheran and Damascus. This in itself is a victory for the latter. Imagine being able to arm, train and incite a terrorist group to violate an international border and deliberately target another country's civilians, suffer no cost, and make your victim come out looking worse! In the terrorism sponsorship business it doesn't get any better than that. MOST IMPORTANT of all, the stock of Iran and Syria has risen across the Arab world. They are now the heroes of the resistance. For the first time, the Persian/Arab, Shi'ite/Sunni wall has been breached. Within Syria, though not Iran, the adventure also increased the regime's domestic popularity. This is a definite win/win situation. Within Lebanon, the cease-fire arrangements solve none of that country's real internal problems. Those who criticize Syria and Iran and Hizbullah know that their lives are in danger and the West won't help them. But if you say anything against America or the West you are pretty safe. What kind of message does that send? The problem is that the international community, perhaps inevitably, works with the Lebanese coalition government (weak, frightened, riddled with corruption) in which Hizbullah is a member. Equally, the military partner is the Lebanese armed forces (weak, highly bribable, and riddled with Hizbullah sympathizers). Thus while the war made Hizbullah less popular in Lebanon, it has not reduced its power in the country. Ironically, about the only real hope is nothing the West does, but rather Saudi financial backing for those Sunni, Druse, and Christian forces opposing Hizbullah. Finally, throughout the Arab world the masses are responding to Hizbullah and its strategy as the new heroes. Osama bin Laden is out; Hizbullah is in. This resurgence of what might be called evil hope has set back for a generation any chance of Arab-Israeli peace or democracy. This irreversible fact is the great silent victim of the Lebanon war. Why compromise if you believe you can achieve total victory and wipe Israel off the map with armed struggle and the manipulation of Western opinion? WHAT IS both sad and shocking is that few people outside the Middle East understand the devastating defeat progress has suffered due to the international position of, at best, neutrality in the war, and the consequent failure to help Israel, moderate Arab states and freedom-loving Lebanese. As always in the Middle East, these mistakes will come back to haunt the globe for a long time to come. The writer is director of the Global Research in International Affairs (GLORIA) Center and editor of Middle East Review of International Affairs (MERIA) Journal.