ISRAELI-OCCUPIED SOUTHERN LEBANON — From the UN observation post, the tiny war zone looks like a target-rich game board.
Dug-in positions of Israeli troops and their south Lebanese proxy militia dot some hilltops; United Nations posts mark others. Below, a deep river gorge is a clandestine route for Islamic guerrillas of Hizbullah, or Party of God.
As if to confirm that combatants are stuck eyeball-to-eyeball, Israeli 155-mm shells blast in an arc over the UN camp - where the tower guard duly logs each round with a hash mark - and land on Hizbullah units to the north.
Lebanon's occupied south is the last active front line after 50 years of Arab-Israeli conflict, and may prove the most difficult to calm. But increasing tension - including a key attack yesterday - mirrors the new focus of the Mideast peace process: talks between Israel and Syria, which dominates Lebanon.
But specific military changes are now altering south Lebanon's war-gaming board, Western analysts say, as Israel is forced to counter more sophisticated Hizbullah attacks. The guerrillas have vowed to turn south Lebanon "into a volcano." And yesterday, three Israeli soldiers were killed by a Hizbullah roadside bomb that came in retaliation for an Israeli air bombardment of guerrilla positions the day before.
Such violence is typical in southern Lebanon, where Israelis and their allies over the past year have suffered a demoralizing daily casualty rate of one dead or wounded.
Reacting to the bomb, Israeli premier Benjamin Netanyahu yesterday appealed to Syria saying, "I think a good indication of Syria's determination for peace ... is a cessation of these hostilities."
On Monday, Hizbullah leader Sheikh Hassan Nasrallah warned that Israel might launch a wide-scale attack on the south to force Lebanon and Syria to negotiate "under its conditions."
For Lebanon, peace requires total Israeli withdrawal from the south. But Syrian and Iranian involvement with Hizbullah complicate the equation.
And for Israel, any peace deal will hinge on disarming Hizbullah and guarantees that cross-border attacks will end after the troops pull out.
But Syria's President Hafez al-Assad has tied any Lebanon deal with Israel to a Syrian one. Syria has 35,000 troops in Lebanon, ostensibly as "peacekeepers," and dominates Lebanon politically and militarily.
Most weapons for the resistance are believed to come via Syria from Iran, which backs Hizbullah. Israel holds Syria responsible for attacks from southern Lebanon.
Unofficial pessimism is manifest in the Israeli Army's request for an extra $1 billion this year - in case of war with Damascus.
"Netanyahu wants Israel to be on the offensive," says a UN source. "They are taking risks because they have to, and losing people. The [guerrillas] are the kings in the field, and Israel must adapt all the time."
Israel's military investment, however, appears to have already been matched by Hizbullah:
* Guerrilla mortar strikes have improved in both accuracy and range, indicating better range-finding systems, low-signature weapons, and the use of mortar boosters that enable consistent hits from 2 to 3 miles.
"There are a lot of questions about how they are able to fire for several days without Israelis detecting them," says a UN source.
* Since November, new Hizbullah antitank weapons have twice burned through the armor plate of Israel's American-made M-60 tanks. The result has been an immediate replacement with heavier tanks.
Antitank weapons with a longer range also appear new to the guerrilla arsenal. And their supply of Katyusha rockets - used for direct attacks on Israel - is estimated to have risen to 1,200.
* Western military analysts say that improved radio-detonated roadside bombs have had a "desperate effect" on the Israelis. Some are disguised as large rocks, a tactic also used by the Israelis and their proxy South Lebanon Army (SLA) militia.
Hizbullah videos - in which Israeli soldiers are engulfed in a blast - show exactly how devastating these methods can be.
* To counter guerrilla effectiveness, Israeli warplanes have been used since September as a "first-call weapon" to retaliate, says a Western military analyst. Nine successive days of Hizbullah attacks over the New Year brought a flurry of air raids.
"Command and control has changed, and there is an early resort to air power," he says. "Though they know they can't kill guerrillas this way, it's an escalatory measure when you start throwing 1000-pound bombs around.... It shows resolve."
* The largest Hizbullah attack in a decade last June - a well-planned assault with concentrated attack groups - convinced Israeli troops to lower their profile.
They are digging in deeper and reinforcing bunkers with earth ramparts. Concrete walls have been built on vulnerable curves.
Defense Minister Yitzhak Mordechai says Israel is doing its best to protect soldiers, but admits "nothing was perfect."
In one incident this month, wounded Israeli soldiers were forced to wait four hours for helicopter evacuation out of fear that Hizbullah would shoot the helicopters down with SAM-7 rockets.
"The Israelis are making themselves much less of a target," says Timur Goksel, UN forces' spokesman in Lebanon. "But as long as they stay in Lebanese territory I can't see an end, because no one is going to lean on Hizbullah to stop."
* Buffeted by high casualties and low troop morale, Israel is applying its own pressure with an elite unit code-named Egoz. It reinforces front-line SLA positions and strikes deep inside Hizbullah territory.
"Israel is patrolling more and in a way they are succeeding, but the price has been high in casualties," says a UN intelligence source. "The bottom line is that Hizbullah has a very good intelligence network linked to a population that supports them."
Analysts say Israeli commanders have been impressed by Hizbullah's evolving abilities. With a core of just 400 to 500 guerrillas - though often played up to imply thousands of well-trained holy warriors - Hizbullah has made the occupation costly.
"Israel has a formidable intelligence operation in Lebanon, but Hizbullah has been able to defy that," says an analyst. Hizbullah has deliberately cut its size since 1992 to prevent infiltration and leaks.
"We [the UN] are there with troops on the ground, but sometimes we don't have a minute's warning before attacks," says a UN source. "Secrecy is their biggest asset."
Combined with new military strength, it is a recipe for attrition until peace is signed.
"Israel realizes it will not win this war," says a UN intelligence officer, "so they can only sit, and lose their people."