You call that a war? Israel loses a round in Lebanon.

ISRAEL in the perception of the Iranian leaders is the West's front line. To attack it is to attack the United States in what they genuinely believe to be--in their words--"a fateful struggle against Western hegemony in the world." As one among other means to that end, they effectively colonized Lebanon through Hezbollah, the militia they have been recruiting, training, and arming there over a number of years. Another means is the Iranian nuclear program, and it says a great deal about the mindset and self-confidence of Iran's rulers that they permitted a test of strength with Israel in the crucial period before that program's completion. It was a tremendous gamble. The Second World War started in much the same way, when the Germans staged a cross-border raid on Poland as the pretext for all-out assault. The parallel holds further: As the Germans in 1939, so the Iranians have scored what may look like success for the moment but contains the seeds of future and more extensive warfare.

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Unlike Poland confronting the Germans, everything appeared to be in Israel's favor. The G-8 summit in July was supportive. President Bush provided Israel with the political scope and the time necessary to crush Hezbollah. Tony Blair concurred, and even the appeasement-minded Europeans for once allowed that Israel had the right to defend itself. The country was united and determined. The Peace Now crowd evaporated. Hundreds of thousands of Israelis were displaced, but there were no scenes of panic at the airport. Reservists duly mobilized and fought as previous generations had done. A high proportion of those killed were officers and senior non-commissioned officers.

Negative factors were soon apparent, however. The Lebanese road system was destroyed to prevent the resupply of armaments to Hezbollah, but the Iranians and their Syrian allies were still able to use minor routes across the Syrian border. Furthermore, the appeasement-minded Europeans soon saw their chance to rally against Israel on the grounds that the bombing was "disproportionate." The Israeli chief of staff, Dan Halutz, an air-force general, will have to explain why he believed that the bomber has replaced the infantryman--a view recently tested to destruction in Iraq. When the air campaign was seen to leave Hezbollah more or less intact in bunkers concealed below schools and mosques and civilian houses, the government called up the reservists but then inexplicably wasted ten more days before sending them in. In the final stage, the Israeli army did get into position to surround Hezbollah south of the Litani River, much as the Russians had trapped the Germans in the famous Kessel at Stalingrad, and this would have led to killing or capturing the lot--but by then the ceasefire stood in the way of any such victory.

Who took which political and military decisions, and why and when, is at the center of the political tornado already lashing Israel. A commission of inquiry into every aspect of the war has been set up, but this may not be enough to deal with the frustration and anger. The untimely illness and departure from office of Ariel Sharon promoted the relatively unknown Ehud Olmert as the succeeding prime minister. The main plank of the Sharon-Olmert party was to hand the West Bank over to the Palestinians for a state. While Hezbollah rockets were landing in their hundreds on Israel, Olmert bewilderingly announced that plans to withdraw from the West Bank were on course, although this would obviously place Tel Aviv and Jerusalem within range of future rockets. (He has since all but conceded that there will be no withdrawal, calling into question his party's raison d'etre.) According to one opinion poll, 51 percent are dissatisfied with Olmert's performance and almost as many think he should resign, while 63 percent think that Amir Peretz, the defense minister, is not up to the job and almost as many think he too should resign. Another poll shows that only a third of Israelis believe that their country won this war.

Almost unanimously, the media are apocalyptic. Ari Shavit, one of Israel's most influential columnists, has captured the public mood with articles alleging "systematic failure" on the part of the national elite, the political and military establishments, the media, and the academics, all of whom have eroded the country's will and capacity to defend itself even against what he dismisses as "a sub-state terrorist organization." Caroline Glick, another columnist of great force, passes the blanket judgment that "every aspect of the government's handling of the war has been a failure." Yossi Klein Halevi, a measured commentator, speaks of the country's "broken heart," while Ze'ev Schiff, the foremost military analyst, has the metaphor of "a slap in the face." To make matters worse, Halutz, the chief of staff, unloaded stock shares a few hours before hostilities were general knowledge, and Olmert is under investigation for acquiring a house at far less than its market value allegedly in return for bending planning regulations--Ari Shavit calls him a "dead man walking." The expectation is for a general election, and all manner of dramatic political and personal fallout.

In contrast, Arabs and Muslims are boasting of a great victory. To begin with, Sunni countries like Egypt, Jordan, and Saudi Arabia were dismayed that Shia Iran looked like landing the entire Muslim world in a dangerous adventure. As Hezbollah continued to hold off Israel, however, and to inflict damage with its rockets, this caution exploded into triumphalism. Hezbollah and its leader Sheikh Hassan Nasrallah have emerged as popular heroes. Sunni Muslims are growing accustomed to the novelty that they need not despise Shia Muslims as they have traditionally done, since together they can defeat and destroy Israel, and afterwards the United States.

This worldview has messianic undertones springing from the sense that Islam is God's ordering for the whole of humanity. To argue with it is futile. The culture further assigns honor and dignity to the victorious, and shame to the defeated, and there can be no arguing with that either. So in Damascus President Bashar al-Assad proclaims to a meeting of Syrian journalists that "the Golan will be liberated by Syrian hands," while in reality he makes sure that Syria fights Israel only through Hezbollah. So Hamas leaders promise to follow the Hezbollah example and uproot Israel, while in reality they know that thanks to Hezbollah they will not now be building a Palestinian state on the West Bank anytime soon. A commander of the Al-Aqsa Martyrs' Brigades on the West Bank similarly insists, "Our brothers demonstrated what we have felt in recent years: Israel [is] falling apart. Next time Iran will be in [the] picture with missiles on Tel Aviv and it will be easier." So hundreds of thousands of Shia villagers are returning to the ruins of their homes in southern Lebanon, knowing in their heads that Hezbollah has brought death and destruction on them, but maintaining aloud that victory is theirs. The imperative of honor invariably trumps reality.

The present ceasefire is even more precarious than ceasefires resulting from Israel's previous wars; it leaves so much unfinished business to swell Israeli disappointments and Muslim expectations. Sheikh Nasrallah is buying support with offers of compensation to Lebanese whose lives and livelihoods he has wrecked, though in that case Iran will have to pay hundreds of millions of dollars. He vows not to disarm. Iran and Syria are restocking Hezbollah arsenals, and Israel has already staged a commando raid in Lebanon's Bekaa Valley as a defensive measure.

The Lebanese army can contribute little or nothing; the majority of its soldiers are Shia and active Hezbollah supporters, while the officer corps contains many Christians. Any order from the Lebanese government to disarm Hezbollah therefore has the potential to spark the sectarian warfare that is the country's bane. In any case, Emile Lahoud, the president of Lebanon in title but in practice the servant of Syria and Iran, has--along with Prime Minister Fouad Siniora and the cabinet--made it clear that Hezbollah is free to do as it pleases, as before. In effect, Hezbollah has staged a coup in Lebanon, securing Iran's front line against the West.

In the past, United Nations forces have proved impotent to keep the peace between Israel and the Arabs, and on occasion they have been positively harmful. Resolution 1701 is a repeat of the flaws and fudging that are the U.N.'s stock in trade. Tragicomedy afflicts these multilateral enterprises. At the moment, the number of troops available to the U.N. is as vague as the timing of their arrival. Their rules of engagement are equally vague. Countries volunteering to send contingents are unwilling to undertake the task that the Israelis did not complete of mastering Hezbollah and thereby attracting the jihadist hostility of Iran. In a sudden flash of insight--or fear--even France, keen to take the lead in the Middle East, has cut down the numbers it first offered. Israel cannot accept troops from Muslim countries that do not recognize it. So Israeli forces may have to remain occupying a buffer zone in southern Lebanon, as after the 1982 invasion. At this stage of its fateful struggle against Western hegemony, Iran has brought about some sort of repeat of the Phony War that followed the Polish campaign of 1939.

Mr. Pryce-Jones, an NR senior editor, is the author, most recently, of Betrayal: France, the Jews, and the Arabs, forthcoming from Encounter.