Halutz Quits.

The resignation of Israel's chief of staff over the conduct of last year's Lebanon war on Jan. 17 prompted calls for the political leadership to follow suit and fuelled speculation about how long the faltering government of Ehud Olmert could survive. Lt-Gen Dan Halutz said in a resignation letter it was his responsibility to step down following an intensive internal military inquiry into the 34-day war with Hizbullah.

The midnight announcement came just a few hours after PM Olmert was informed that he faced a criminal investigation into his role in a 2005 bank privatisation, the latest of a series of corruption scandals to engulf the ruling coalition. Political analyst Hanan Crystal told Israel Radio: "The investigation of Olmert and Halutz's resignation in the wake of the Lebanon war could rock the foundations of the government".

Gen Halutz's decision to quit came ahead of the findings of the government-appointed Winograd commission, due to pronounce on Israel's shortcomings in the Lebanon war. The military has been accused of lack of preparedness for a conflict during which it failed to crush Hizbullah, free two of its abducted soldiers or halt rocket fire into northern Israel.

The imminent departure of Gen Halutz, who will remain in office until a successor is appointed, raised immediate doubts about the future of Labour party leader and Defence Minister Amir Peretz, whose standing in opinion polls had virtually evaporated. Opposition politicians and families of Israeli soldiers killed in the Lebanon war demanded that he and Olmert should quit, while one right-wing parliamentarian proposed new elections.

Zvi Hendel of the National Union said: "The situation the state of Israel is in today obliges us to return to the voter".

Many commentators predicted that Olmert would survive the inquiry into the 2005 privatisation of Bank Leumi in which, as finance minister, he is alleged to have used his influence to try to determine the outcome of the sale. He has denied any wrongdoing. Some analysts noted, however, that the PM faced other corruption inquiries, as did a number of his fellow ministers.

Nadav Eyal in the daily Ma'ariv wrote: "Very few people in the political establishment believe that the prime minister will go down due to the Bank Leumi affair. But even fewer believe that he will be able to survive the coming year and a half in power". The problems confronting Olmert have multiplied at a time when he faces deadlock in the peace process with the Palestinians and the looming threat of a showdown over Iran's nuclear programme.

When Gen Halutz was appointed barely 18 months ago as the first air force officer to serve as Israeli chief of staff, a number of commentators noted he would be the ideal man to oversee an eventual air assault on Iran's nuclear facilities.

The collapse of support in opinion polls for Olmert's Kadima party has prompted fears among his colleagues that the centrist movement founded by Ariel Sharon in 2005 might turn out to be a one-term phenomenon. The outcome of the Lebanon war forced Olmert to shelve his plan for further Israeli withdrawals from the West Bank. Political uncertainty has since prompted other politicians - including Peretz, Foreign Minister Tzipi Livni, and former defence minister Shaul Mofaz -to float their own diplomatic initiatives, an area traditionally reserved for the PM.

The Sunni-Shi'ite Cold War: The New York Times on Jan. 17 pointed to Hamada Abdullah, a Sunni Muslim Egyptian who, after Hizbullah battled Israel for 34 days last summer, posted a small picture of Hassan Nasrallah on the bare wall of his home. It did not matter that Nasrallah was a Shi'ite who led an organisation which only allowed Shi'ites to be members and was aligned with the Shi'ite theocracy of Iran. The paper said: "To Abdullah, Nasrallah was first and foremost a bold Arab leader. A resistance leader. But these days Abdullah says he is suspicious of Nasrallah and his politics". Then the paper quoted Abdullah as saying of Nasrallah and Hizbullah: "His whole army in the south of Lebanon, they are Shi'ites", with the paper adding that Abdullah leaned over "as if to convey something shocking and offensive during a meal in his living room in a village outside the city".

The NYT noted that the botched hangings of Saddam Hussein and his aides, the bloody sectarian violence in Iraq and the political power struggle in Lebanon between Hizbullah and the government "have all conspired to aggravate sectarian tensions around the region". Perhaps more to the point, they have "undermined the sense of pan-Muslim unity which Shi'ite clerics and Iranian leaders had tried to promote - and which was felt on the streets of many Arab countries - as a means to enhance their regional influence".

The NYT quoted Taher al-Masry, a former prime minister of Jordan, as saying: "When Hezbollah did what they did in Lebanon in the summer, no one thought of it as a Shiite party; it was a nationalist party. Now with the events in Iraq culminating in the way Saddam Hussein was executed and the lack of condemnation and total silence of Hezbollah, many people are examining the position of Hezbollah as a Shiite party".

The growing sense of separation Sunnis are feeling towards Shi'ites has not grown organically from events in the region. Instead, it has been promoted by some Sunni religious leaders and Sunni states - primarily Egypt, Jordan and Saudi Arabia - which had been looking for a wedge to drive between their citizens and Shi'ite leaders from Iran. The hanging of Saddam on a Sunni holy day, for example, which led to sharp criticism of the US, was also seen as offering a benefit to US allies in the region in that it was used to create sectarian tensions and to push back against Iran's growing influence. But there are risks.

The NYT quoted Emad Gad, an expert in international relations at the government-financed Ahram Centre for Political and Strategic Studies in Cairo, as saying: "The reality of the current situation is that we are approaching an open Sunni-Shiite conflict in the region. And Egypt will also be a part of it as a part of the Sunni axis. No one will be able to avoid or escape it".

Sunnis make up the vast majority in the Islamic world, with Shi'ites comprising the second-largest sect. The two split in a dispute over who would lead the Muslim community after the death of the Prophet Muhammad. While there are many theological differences between the two groups - and similarities - the gathering conflict is not fuelled by religion. Instead it is being stoked by a determination on the part of Sunni leaders to preserve, or reinvigorate, their waning influence and power in the region - while Shi'ites have been emboldened and so have pressed for more influence.

After the war between Hizbullah and Israel, Shi'ite leaders seemed to reach their zenith as an antidote to a Sunni Muslim leadership widely viewed as corrupt, impotent and stooges of the West. Iran's President Ahmadi-Nejad and Nasrallah both won wide followings across the region for their willingness to defy the US. After its war with Israel, Hizbullah and its allies pressed for more power in Lebanon and when rebuffed, began demonstrations that aim to topple the government. Fuelled by the state-controlled news media in many Sunni states, there is a growing divide across the Middle East between Sunnis and Shi'ites.

Egyptians, for example, are inundated on a nearly daily basis with headlines and commentaries and TV reports of supposed Shi'ite transgressions. "Raising the ugly face of Shi'ites, expanding Iranian influence in the region", read a headline in a recent edition of Rose el-Youssef, a pro-government Egyptian weekly newspaper. Writing in a Palestinian-owned newspaper, al-Quds al-Arabi, Abdel-Berei Atwan, the editor-in-chief, commented on what he saw as efforts to fan sectarian tensions: "America confirmed that the humiliating execution of Iraqi President Saddam Hussein on the holy Id al-Adha was well studied and planned by the US and its spiteful sectarian allies in Iraq, to widen the sectarian sedition in the region and hasten the process of polarisation between the Shi'ite crescent and the Sunni arc".

The response of a threatened and vulnerable Sunni leadership began long before the hanging of Saddam. In August, after Hizbullah was perceived in Cairo to have won its war against Israel, a Sunni religious scholar, Shaikh Youssef al-Qaradawi, warned against Shi'ite interference in Sunni affairs. He was quoted as saying in the Sept. 2 edition of an independent daily Egyptian newspaper, al-Masry al-Youm: "I am calling on bringing the sects closer, and I am supporting Hizbullah in its resistance, but I do not accept that they penetrate our countries, warning against the slaughters that may occur like those in Iraq between Sunnis and Shi'ites if there is a huge Shi'ite penetration of Egypt. So we have to be vigilant".

In the gathering response to perceived rising Iranian and Shi'ite influence, in December, a top Wahhabi religious leader close to the Saudi royal family, Abdul-Rahman al-Barak, said Shi'ites should be considered worse than Jews or Christians. Referring to Shi'ites, Barak wrote in a religious edict that was posted on his Website: "By and large, rejectionists are the most evil sect of the nation, and they have all the ingredients of the infidels".

Such feelings have not taken hold but have instead begun more of a creeping sectarian tension. In Abdullah's village in the Nile Delta region of Egypt, where many people had, like he did, posted a picture of Nasrallah, there is no firm understanding of the ideological differences between Shi'ites and Sunnis. But there is, especially since Saddam's hanging, a growing sense of difference. "Saddam Hussein was the one courageous man among Arab leaders", said Ibrahim Mustafa Ibrahim, a janitor in a local school, adding: "We saw how he was executed. We saw everything".