Notes from our Israel correspondent in Haifa, Israel

Today we spoke with our Israel correspondent in Haifa, one of the cities hit by Hizbollah rockets. Below we are providing the text of a conversation with him in which he describes the mood in the country and looks at the possible scenario that may unfold over the next few days.

Haifa, 12 noon, July 17 - Israel's overall aims are not clear at the moment, but one thing is clear: they intend doing serious damage to Lebanon and throwing it back very far. They have already partially achieved this aim and it will get worse in the coming days.

Their main aim is to smash Hizbollah, but in their bombing campaign they have also hit targets not connected to Hizbollah. For example they have also hit Christian towns and villages.

I have been listening to Nasrallah, leader of Hizbollah. He is clearly a reactionary, but there is one thing you can say about him: so far he has done what he has said. So his threats need to be taken seriously.

What we have to understand is this: in spite of being a reactionary Nasrallah has the support of ordinary people, especially in the South of Lebanon. But the right wing in Israel - the pro-Americans - is attacking him. This actually makes him more popular.

On Thursday something hit Haifa. It is not clear what it was, but it seems it was a very small rocket. Nasrallah has denied that that specific rocket was fired by Hizbollah. What is clear is the immediate reaction of the Israeli military who went on to bomb south Beirut in an attempt to get Nasrallah. Bush has backed Israel in its attempt to assassinate this man.

Nasrallah, speaking from his bunker, issued a statement saying, "We warn you; now you will see what I can do..." and shortly afterwards the Hizbollah hit an Israeli ship, severely damaging it. The immediate response of the Israeli military expressed through the media was to try and laugh it off and even deny it. But four Israeli soldiers had been killed and the ship had to be pulled out and back into an Israeli port.

Nasrallah has also issued another warning. He said in his statement, "Don't force me to hit the industrial area of Haifa..." This industrial area contains a lot of chemicals, gasoline and so on, and if it were hit it would be a major disaster.

The Hizbollah now have sophisticated rockets that can guarantee quite precise bombing, so Nasrallah knows what he is aiming at. I believe it is a question of days before he hits Haifa again in a serious way. Yesterday he hit Haifa and 8 civilians were killed. This hit came just after the Israeli generals had been boasting about how the Hizbollah could not do this. They were full of themselves.

At present a kind of psychological warfare is being mounted by the Israeli authorities against the population of Israeli. And contradictory messages are being sent out. This is provoking a certain scepticism among the people who are starting not to believe or trust what the authorities are telling them. Most people here no longer believe the government, but of course they hate Hizbollah as well. The main feeling is one of fear and insecurity.

This morning, for example, was the third morning in a row that I have been woken up by 6am sirens, and each time it has been a false alarm. Israel has been promising the civilian population that it would use its Patriot missiles to stop any incoming rockets. In reality Israel is not ready for these attacks.

The fact is that Hizbollah is more powerful than many may think. It has about 10,000 soldiers and modern weapons at its disposal. It is not an easy task to destroy Hizbollah as a force, and even if Israel went in it would find it very difficult to deal with it.

Israel's aim is clearly to destroy Hizbollah's fighting capacity. To do this I do not think they need to occupy parts of Lebanon. What they want is to force the Lebanese Army to push back the Hizbollah. But the Lebanese Army cannot do this. The Hizbollah is very powerful. One idea they have is to cause such concern internationally that the Europeans would be forced to intervene under the umbrella of UNIFIL as a kind of buffer on the Israeli-Lebanese border. But even UNIFIL would not be able to remove Hizbollah. They might get them a few kilometres away from the Israeli border, but that would not make a fundamental difference from a military point of view. In any case UNIFIL is not trusted by the local population in Lebanon, as that case of the family that was killed trying to get to Syria demonstrates. The UN refused to take them in and so many now blame the UN for their death.

It is difficult to know how long this war can last. It could last one or two weeks more. There are some unknown elements in the equation.

The first question we have to ask ourselves is: would Syria and Iran intervene? Syria is trying to stay out of the conflict and Israel also seems to be concerned not to open up this third front. Syria has denied that any Israeli rockets have hit Syrian territory, but this also is dubious. How long this situation can hold is unclear. If the Syrian population starts to be hit then the regime could come under pressure to do something and it could be sucked in.

On the other hand imperialism is doing nothing concrete to stop Israel. US imperialism in particular is de facto supporting Israel.

If we look at the number of casualties on both sides we see an enormous imbalance. On the Israeli side so far there have been around 20 people killed, both military and civilian, with around 100 injured. But on the Lebanese side over 100 have been killed and around 300 have been wounded. Today alone the Israeli air forces carried out 1200 sorties over Lebanon. This is serious bombing and is on a very high scale even compared to previous wars.

How things will pan out we can only see in the next few weeks. One thing that is clear is that this war is very expensive, hugely expensive. It is costing Israel billions of dollars already. Inside Israel most of those hit are ordinary civilians, many of whom will find it difficult getting compensation. Once this war is over there will be a bitter mood. Politically speaking Israel has already lost. We are now into the sixth day of bombing and the end is nowhere in sight, and all this against an army of 10,000. In past wars the Israeli army would advance very quickly with spectacular successes. This is not happening this time and it will leave its mark in people's minds.

Inside Lebanon we see how the majority of the pro-American government is accusing Hizbollah of destroying the country, but they can do very little. For example the Israeli forces bombed some Lebanese police, but the Lebanese army did nothing. They are in fact under orders not to shoot back! The Lebanese government is desperately trying to avoid war. The problem is it does not have all the levers of power in its hands.

The Arab governments on the other hand are doing nothing to help the Lebanon. They are allowing Israel to butcher the country. The irony is that Saudi Arabia is one of the main investors in the reconstruction of Lebanon after the last civil war.

As I said before, we still don't know how long this will last and what the precise outcome will be. The fighting will go on for a while. There will be a lot of destruction and then some kind of cease-fire will be brokered. Syria remains a question mark. They have bombed and destroyed roads into Syria. The fact is that most people in Syria support Nasrallah, so how long the Syrian regime can resist the pressure we don't know.

One important thing to note is that the Israeli generals feel they are losing influence in the decision-making process and they want to re-impose their past role in Israeli politics.

I think it is unlikely that they will go into southern Lebanon. If they do go in many soldiers would be killed and the people have the terrible memory of the last time Israeli soldiers were in the Lebanon. In the year 2000 Israel was forced out of the Lebanon because of two main factors. One was the fighting ability of Hizbollah which was causing a lot of casualties to the Israeli army. The other was the mood this was creating back home among the civilian population who could no longer tolerate the situation.

That is what is making the option of sending troops into Lebanon now more difficult. I think it is unlikely that they will want to go in and stay. But of course, they could make the same mistake again. They've done it before. The main thing to understand is the mood among the population that does not want a repeat of the last occupation of the Lebanon.

I think the thinking of the people at the top is that if they can even push back Hizbollah one or two kilometres from the border then they can present this as a victory. Today's "clearing" of one kilometre would indicate that may be the case.

Another element in the situation is that Hizbollah is targeting civilians inside Israel. This is having two contradictory effects. On the one hand there is the hard-line position of "go after them, no matter what price, hit back." But there are the others who are simply fleeing the zones at risk.

Nasrallah has announced that he can hit Tel Aviv. The government denied this, but then the army said that he could. These contradictory statements are sending out the message that there is no clear direction at the top. There are also many signs that the Israeli army does not have a clear view of what it is doing.

What I think is true is that Israel had been planning this war for some time. According to different sources it seems that the Israeli military carried out some acts of provocation. Al-Manur, the Hizbollah TV station, claims that Israeli jeeps actually entered Lebanese territory just before the kidnappings. Al-Manur has been quite reliable in its news reporting and so there may be some truth in this claim. It would indicate that the Israeli army chiefs were looking for an attack that would give them the justification for counter-attacking.

It may be the case also that Hizbollah miscalculated. I don't think they were expecting such an all-out attack. They thought this was their opportunity to simply get an exchange of prisoners, as has happened in the past. But now Israel is using this to attack all of Lebanon.

On the other hand it is also true that this is the first time since 1948 that Israel has been hit like this, so far into its own territory. This is generating a tremendous feeling of insecurity. This morning I went to the local supermarket to do some shopping and found that many items were missing from the shelves. The staff told me that early in the morning people had been panic buying to horde goods. And of course all the prices have jumped. In all my years I have never seen such a mood in Israel.

The degree to which the authorities must be worried is revealed by the enormous propaganda campaign they have mounted. They are constantly pumping away with the idea that "we must be united, we need massive support of the people" and so on.

Among the Ashkenazi intelligentsia there is clearly a split, with some sections seeing the barbarism of the Israeli government. The mood of some Israelis can be seen also by the fact that many are trying to get another passport. This wouldn't have happened twenty years ago. The population is very confused. Zionism is in a huge crisis. It is a very unusual situation.

It is unfortunate that Nasrallah's only aim is to break the backbone of the Israeli people. He has no concept of class divisions in society. If instead of the reactionary that he is he were to have a Marxist approach, i.e. to appeal to the ordinary working people, to target the military but not the civilians and so on, he could actually have an impact. The mood in Israel is different to what one might expect. Were there a different leadership - on both sides - the situation here would be a very different one.

Israel is not the society that it was and also the balance of forces in the region has changed, and Israel will never recover what it had in the past.

Haifa, 19.00, July 17

The latest news is that there seems to be international pressure building up to reach some kind of deal. Damascus, Tehran and the French have been meeting. Blair is talking of some kind of international force to be deployed in the area.

Radio "Free Lebanon", a right-wing Christian station, has just reported that an Israeli F16 plane has been shot down. But the Israeli authorities immediately denied this. Al-Manur reported that a large, silver coloured vehicle of some kind had been brought down and had then exploded. The Israeli TV has shown pictures of something in the sky on fire, going up and down, but tried to deny that it was a plane. Al-Manur then said that it was a helicopter. The people watching this don't know what to think. It would seem that Hizbollah have the means to bring down Israeli fighter helicopters.

Tonight Olmert is going to "talk to the nation" on TV. He will praise the people and try and whip up a spirit of national unity, but they are clearly worried. They know there is a limit to how much the people can take. While all this rhetoric is being churned out it is clear they are hoping to cook up some deal.

If they are forced to back off then there will be a tremendous mess. The cost is mounting up by the minute. Every day 200 Israeli warplanes are being used. Once all this is over they will announce more cuts in social spending to pay for the war effort. The same will happen on the Lebanese side. How much more can the people take?

Today there was a small incursion into Lebanese territory by Israeli Special Forces to "cleanse" a one-kilometre strip along the border. This links up to what I said earlier today, that they may try and reach a deal whereby Hizbollah is forced back a few kilometres from the border and then the Israeli government can shout victory, when in reality it would be nothing of the sort.

Of course, the situation can also develop a logic of its won, beyond the control of the people at the top and Israel can get sucked into a scenario it had not planned for. We will see in the next few days.

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