Hezbollah was weakened by Israeli attacks and the loss of senior figures during last year's war. AFP
Hezbollah was weakened by Israeli attacks and the loss of senior figures during last year's war. AFP
Hezbollah was weakened by Israeli attacks and the loss of senior figures during last year's war. AFP
Hezbollah was weakened by Israeli attacks and the loss of senior figures during last year's war. AFP

Hezbollah 'divided' over whether to scale back its arsenal amid US pressure to disarm


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Hezbollah is reviewing a US proposal urging the group to disarm within a few months, Lebanese sources told The National before a visit by US envoy Thomas Barrack on Monday.

The Lebanese group, which is under mounting US pressure and daily Israeli strikes, is internally divided over whether to scale back its arsenal, an informed source close to the matter told The National. The "carrot and stick" US plan could bring reconstruction funds and an end to Israel's attacks.

The increased US pressure on Hezbollah comes amid a major political shift in the Middle East, which has resulted in Iran’s proxies being significantly weakened since the Hamas-led attacks in Israel on October 7, 2023. Israel’s devastating war on Gaza prompted many of these proxies to launch their own attacks against Israel.

On October 8, 2023, in support of its ally, Hamas, Hezbollah initiated tit-for-tat exchanges along the Lebanon-Israel border, which Israel later escalated into a full-scale war. The conflict ended in November, leaving Hezbollah, once Iran’s most prized asset, significantly weakened, with much of its arsenal destroyed and parts of its leadership decimated. Hezbollah’s disarmament, once considered a political taboo, is now on the table.

In June, Mr Barrack, the US special envoy to Syria and ambassador to Turkey, sent a roadmap to Lebanese authorities calling on Hezbollah to relinquish its weapons across the country within a few months, in exchange for financial support and a halt of continuing Israeli military operations.

"Lebanon’s hope awakens!!! The opportunity is now. This is a historic moment to supersede the strained confessionalism of the past," M Barrack wrote on X ahead of his visit.

Hezbollah has been holding clandestine talks to decide on its future, Reuters reported on Friday. Still, observers have raised concerns about the US pressure tactics, stressing that Hezbollah’s weapons remain a highly sensitive issue in a deeply fractured country, where the group continues to enjoy broad popular support.

'Carrot and stick'

Mr Barrack's roadmap calls for a rapid disarmament of the group in return for the release of much-needed reconstruction funds for the war-ravaged country. It also calls for Israel’s withdrawal from five occupied border points it seized in October during its aerial campaign in Lebanon, and a halt to Israeli military operations, according to the source.

Mr Barrack described this approach to disarming Hezbollah as “a carrot and a stick” in an interview with The New York Times.

US envoy Thomas Barrack is expected in Lebanon on Monday. EPA
US envoy Thomas Barrack is expected in Lebanon on Monday. EPA

Under the terms of the ceasefire between Hezbollah and Israel, brokered by the US and France, all armed groups in Lebanon must give up their weapons, starting from the south of the Litani River, which lies 30km from the Lebanon-Israel border. In return, Israel must withdraw from the areas in south Lebanon it seized during the war and halt its violations of Lebanese airspace.

Lebanese authorities said they have dismantled almost all of Hezbollah's infrastructure near the border with Israel since the ceasefire. But despite this progress, Israel has continued to carry out air strikes, saying it is targeting Hezbollah and accusing the group of violating the truce, which Hezbollah denies.

Lebanese authorities say Israel has violated the truce more than 3,000 times. Israeli bombardments since the ceasefire have killed least 71 civilians, according to the UN.

The US-backed Lebanese President Joseph Aoun has pledged to establish a state monopoly on weapons, while emphasising that this should be achieved through dialogue with Hezbollah, not by force. Hezbollah retains strong support within parts of the Shiite community, many of whom rely heavily on its social services in the absence of a functioning state.

On Sunday, Hezbollah chief Naim Qassem said the group was ready for peace and dialogue on the one hand, but "confrontation" on the other should such circumstances arise. "We are a people who do not submit, we will not give up our rights and dignity," he stated.

Mr Qassem said the group remained steadfast, despite the threat from Israel and others. "This threat will not make us accept surrender," he said. “How can we confront Israel when it attacks us if we didn’t have them?" he asked, in reference to the pressure for the group to hand over its weapons.

"Who is preventing Israel from entering villages and landing and killing young people, women and children inside their homes unless there is a resistance with certain capabilities capable of minimal defense?”

Observers have cautioned that dismantling the group without considering local dynamics could further destabilise Lebanon. But “for Washington, the internal complexities Lebanon faces in attempting to disarm Hezbollah are secondary; the focus is on safeguarding Israel”, the source said.

Mr Barrack’s stance aligns with that of Morgan Ortagus, the former official who oversaw the Trump administration’s Lebanon portfolio and is known for her pro-Israel position. “The US's primary concern is state monopoly on weapons and, above all, the security of Israel,” the source added.

The position is motivated by a desire to avoid a repeat of the 2006 war between Hezbollah and Israel, which ended with UN Security Council Resolution 1701, calling for the disarmament of the group. However, Hezbollah began rebuilding its arsenal soon after. “It still haunts Israelis,” the source said.

Today, the situation is drastically different. Hezbollah is grappling with acute financial strain, a decimated chain of command, and severed supply routes following the ousting of its ally Bashar Al Assad in Syria, all amid broader regional shifts in the balance of power.

Western diplomats have previously told The National that the intense pressure placed on the new Lebanese government, embraced by international powers, and marked by a significant decline in Hezbollah’s political influence could jeopardise its stability.

The US pressure tactics could also backfire, the source warned. “There’s a risk Hezbollah could feel cornered and respond defensively,” the source said.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: July 07, 2025, 4:22 AM