Israel is taking further steps to convert southern Lebanon into a ''North Bank'' in anticipation of a partial withdrawal into a 25-mile security zone, according to diplomats and international agencies based in the south.
The Army is attempting to consolidate its position through local political and military groups, increasing the use of force and intimidation against opponents of the so-called ''United South Assembly.''
A United Nations official called the situation ''a crossroads,'' since the predominantly Shiite Muslim residents who have been resisting affiliation with the United South Assembly since it was established last February may soon have no alternative but to join or support the pro-Israeli infrastructure in occupied southern Lebanon.
A report by one of the 10 nations participating in the UN contingent in the south said this week: ''There is continuous pressure on the population by various forms of collective reprisals and frequent raids of villages for what is called 'deterrent arrests.' ''
Diplomatic sources say the ''deterrent arrests'' are aimed at opponents of the Israeli presence, or opponents of the ''village committees'' and ''national guard'' branches of the United South Assembly, modeled on the controversial village league system used in the Israeli-occupied West Bank.
Israeli forces have also reportedly initiated collective punishment against villages where resistance has been shown. These tactics have included random curfews, house-to-house searches, ''indiscriminate'' detentions of men, and destroying cars, Western envoys say. ''It is pure and simple intimidation,'' one commented.
The intensification of the campaign is apparently tied to preparations by Israel for a quasi-permanent presence in southern Lebanon. Due to the absence of progress in winning agreement from Syria on withdrawal of all foreign forces, it appears the Israeli-Lebanese accord of May 17 will not be implemented for some months, if at all.
The Israeli government formally decided Wednesday to redeploy a portion of its 25,000-man force in Lebanon to more defensible positions. The redeployment, expected to be carried out in stages over a two-month period, will be away from the volatile Shouf region near Beirut to positions near the Awali River, 24 miles north of the Israeli border.
The redeployment could mean a long commitment in south Lebanon for the Israelis, who have already been there for more than 13 months.
''The Israelis are coming after midnight to take people away from their houses, and there isn't much we can do about it,'' explained Timur Goksell, spokesman for the UN Interim Force in Lebanon (UNIFIL).
The new militias - trained, armed, and sponsored by the Israelis -have become an increasing menace in the area south of the Awali.
A recent report by UN Secretary-General Javier Perez de Cuellar said Israeli recruitment and arming of selected villagers posed a ''major problem'' in south Lebanon. The report added that the increase of these ''national guards,'' which have no authorization from the Lebanese government, led to a number of incidents during the first half of the year, including one clash with UNIFIL forces in which one Fijian soldier was killed.
The militias serve as ''eyes and ears'' for Israel, performing the kind of highly visible jobs, such as manning roadblocks, that make Israeli troops vulnerable to attack.
To help pay for their costs, ''the militias are extorting money from the villagers, who are too scared to let us know before they pay,'' Mr. Goksell said.
He added: ''There was a period after the signing of the Lebanese-Israeli accord when those local militias suddenly got the impression that they had become legal forces overnight. They became more arrogant and forceful in their behavior, and this caused some friction on the ground.''
Although there has been a significant increase in recruitment lately, diplomats feel the militias are still short of the minimum goal of one full brigade, or roughly 3,000 men.
The village committees have not been so successful, despite what diplomats describe as ''repeated summonses'' by Israeli officers of local muktars, or traditional chiefs, to order them to set up pro-Israeli governing units.
The Israelis appear to be supplementing the political plan through renegade Lebanese Army Maj. Saad Haddad, who ran a ''Free Lebanon'' enclave in the south before the Israeli invasion last summer. Earlier this month he offered residents of the south new identity cards issued by ''Free Lebanon,'' which would help at roadblocks as well as in receiving benefits such as health and social services provided by Israel.
Diplomatic sources predict a major increase in membership of both the ''North Bank'' village committees and militias if Israel withdraws to the southern zone. One said: ''These people will have to go along, but not because they want to.''
He added that there is an irony, since the Israelis might have gained wider backing by using different tactics. ''The Israelis missed their chance earlier. Some people in the south were sincere when they threw flowers at the invading Army (last summer), because they were happy to be rid of the Palestinians.
''But the Israelis played the game with the wrong people, building militias with people who had bad reputations, sometimes criminal records. They planned to use force rather than exerting pressure through the traditional leaders of the area.''
UN sources in the south contend Israel does not have a strong hold on its proposed security zone at the moment: They control only the main roads in the scenic rocky hills.
A high-level official predicted the occupying Army was prepared to launch a complete sweep after withdrawing to the security zone. ''They will do a Gaza,'' he suggested, a reference to the security clampdown followed by house-to-house searches by the Israeli Army in the occupied Gaza Strip in the early 1970s, which finally brought troublesome elements under control.
The source noted, however, that the ''North Bank'' strategy and any additional steps were not likely to guarantee an end to Israeli casualties, ''even in 20 years.''
''The Lebanese are different from the Palestinians in Gaza. The Lebanese have a country, and they want it back.''