Israel lost its war of aggression on Lebanon, but repercussions continued as voices were raised, calling for a change of government in Beirut. Lucy Fielding guages the year's events Lebanon reaped the consequences of its inherent contradictions in 2006. The fragile balance established to end the civil war was only ever meant to be temporary. Sixteen years later, the spoil-sharing system kept various sects engaged in politics, but had done little to ease sectarian divisions or the gap between rich and poor. A resistance movement existed in parallel to the Lebanese army, but the state was ambivalent about its role in the Arab- Israeli conflict. Paralysis and polarisation reigned. And then came the war. On the night of 13 July, Israel's pounding of the southern suburbs shook Beirutis from their sleep and brought the simmering conflict in South Lebanon to the fore. By then, Israeli jets had pounded the border area for two days following Hizbullah's seizure of two soldiers and killing of eight in a cross-border raid aimed at bringing about a prisoner exchange. Many analysts say the raid was timed to also divert international attention from Iran's nuclear programme. Instead of limited anticipated border skirmishes, Israel launched an all-out war to destroy Hizbullah, killing 1,200 people in Lebanon, mostly civilians. The destruction was unprecedented in scale, including 130,000 housing units, most in the south, schools, hospitals, factories, hundreds of bridges and roads. In the last three days of the war, according to the UN, Israel showered the south with cluster bombs, leaving more than a million "duds" that have killed and injured scores of people since. Nearly a million people were driven from their homes; many found nothing to return to when the UN- brokered cessation of hostilities came into effect 34 days later. Questions about Lebanon's regional role and alignments and how the tiny state of four million should defend itself could no longer be ignored. Neither side won a decisive victory, though both claimed one. Hizbullah defied expectations by inflicting heavy losses on Israel's army and preventing the Jewish state from achieving its aims -- to destroy Hizbullah's fighting capacity and rescue those taken prisoner. It also brought the war home to Israelis, firing thousands of rockets over the border. But despite garnering unprecedented respect across the Arab world -- including cult status for Secretary- General Hassan Nasrallah -- Hizbullah was cornered at home. Lebanon's army spread to the far south following the ceasefire agreement for the first time; a step Hizbullah ostensibly welcomed, but which limited its scope for open manoeuvre along the border. Meanwhile, UNIFIL's border force was expanded. Although Hizbullah says it has rearmed and has more rockets now than it did before 12 July, there is little appetite among the devastated Shia community, let alone Lebanon as a whole, for more confrontation. For now, Hizbullah is focusing on rebuilding and gaining the political representation it sees as commensurate with its successes. Washington's refusal to pressure Israel into a ceasefire left its ally Prime Minister Fouad Siniora in an awkward position, to say the least. Siniora put forward a seven-point plan to end the war, parts of which were eventually incorporated into UN Security Council Resolution 1701. But the damage was done. As 2006 came to an end, Hizbullah and Michel Aoun's opposition stepped up accusations that the government collaborated in a war on its own people, hoping Israel would solve the problem of "Hizbullah's arms". Because of perceptions concerning the US's hand in the war, Hizbullah sees its campaign against the government as a battle against hegemonic US plans for a "new Middle East". Resolution 1701 called for all weapons to be in the hands of the state but did not stipulate how this should be done. Instead, Hizbullah and the army tacitly agreed to leave the weapons and underground tunnels intact for as long as they remain hidden. Hizbullah's claim of a "strategic victory" reinforced its will to keep its arms; Israel's aggression was cited as further justification. The resignation of Hizbullah's two cabinet ministers, three allies from the Shia Amal Party and one allied to the president in November 2006, as well as a walk-out at the start of the year, showed the fragility of Lebanon's consensual system. While Saad Al-Hariri, son of Rafik, and the 14 March bloc based their legitimacy on commanding a parliamentary majority won in the 2005 elections, Hizbullah and Shia ally Amal cited the constitutional need for consensus and sectarian representation. Disputes over an international court to try suspects in Rafik Hariri's killing cropped up at several key junctures. In late 2005, Lebanon's government made a formal request to the UN for a tribunal. Five Shia ministers walked out. They said they had not been consulted on the decision; the anti-Syrians led by Hariri said Syria was trying to block the court. A year later, when consultations broke down over a national unity government and ministers resigned in the run-up to a major opposition push to bring down the government, 14 March again said the aim was to block the court. Controversially -- some said illegitimately -- it rushed through a vote on a UN draft plan to form the court. Pro-Syrian President Emile Lahoud refused to sign it and the dispute continues. Earlier in the year, Hizbullah and its allies approved the court in principle in a "national dialogue" of leaders. Amal leader and parliament speaker Nabih Berri convened the talks in March to tackle issues that had polarised Lebanon since Al-Hariri's death. The talks were widely hailed as the first time Lebanon's major leaders had gotten together; some had not met since the civil war. Early agreements were reached on disarming Palestinian groups outside Palestinian camps, the need to establish diplomatic relations with Syria and the Lebanese identity of the Israeli- occupied Shebaa Farms area, which the UN rules as being Syrian, but Syria and Lebanon say are Lebanese. The dialogue stalled in June, however, without agreement on elections to replace Lahoud , seen as illegitimate by the anti-Syrian camp since his term was extended under Syrian pressure in 2004. The president has defied expectations that he would have to leave office early and may even sit it out until the end of his term in late 2007. On another front, despite talk of a national "defence strategy" that might involve bringing Hizbullah's fighters under the nominal command of the Lebanese army, Hizbullah's arms survived to fight another day. If the 14 March anti-Syrian movement had hoped that Syria's withdrawal in 2005 would weaken and isolate Hizbullah, 2006 was the year the group jumped to the fore. Help came from an unlikely quarter. In February, Hizbullah signed a "Memorandum of Understanding" with former General Michel Aoun, once Syria's most vocal critics and Lebanon's most popular Christian leader. It was a savvy move that pulled the rug out from under the 14 March bloc, giving presidential hopeful Aoun a more decisive role. It also, many argued after this summer's cataclysm, prevented a descent into civil war. The war exposed Lebanon's rifts. As the opposition accused the government of corruption and collaboration, the pro-government camp accused Hizbullah of dragging their country into a ruinous war at the bidding of Iran and their archenemy Syria. The assassination of Industry Minister Pierre Gemayel, grandson of the founder of the far-right Christian Phalange Party, accentuated these splits. The 14 March bloc immediately accused Syria while others said Damascus had little to gain in a killing that wrong-footed its allies in Lebanon. An opposition campaign of street demonstrations was delayed as a result, but when it started, it was huge. Initially calling for a blocking third in the government, and therefore a veto on its decisions, the opposition upped its demands in December to new parliamentary elections. The Hizbullah- Aoun axis also wants a new electoral law that would be less sectarian and, therefore, the theory goes, favour the true majority on the ground that it says it commands. The year ended with the now familiar sight of flag- waving protesters thronging Beirut's central squares while Siniora and his ministers were holed up in the Grand Serail government building round the clock. The dispute has taken on worrying Sunni-Shia trappings, with the government praying behind Sunni clerics in the government building, and the killing of a Shia protester in a Sunni area. Desperately needed political and economic reform remains distant. Deadlock, polarisation and stagnation may be Lebanon's headlines for 2007, too, if the government and opposition cannot meet halfway. A new electoral law, analysts say, would be a first step towards abolishing a troubled sectarian political system. Regional efforts to end the crisis stepped up at the end of the year, with Arab League Secretary General Amr Moussa shuttling to and from Lebanon to meet leaders on both sides. Talks between Iran and Saudi Arabia -- which backs the Siniora government -- appeared to be in the offing. Lebanon's battles always have a strong parochial element, but the country undeniably took on its familiar role of a theatre for proxy wars this year. Major regional movements in 2007 will have a knock-on effect in Lebanon -- in particular any push for peace in Israel-Palestine, US pressure on Israel to respond to Syrian calls for renewed talks on the Golan, or warmer Western relations with Iran. A Democratic Party victory in November's US mid-term elections was seen as a bloody nose to President Bush over his foreign policy and the Baker-Hamilton Commission prescribed dialogue with Iran and Syria to extricate Washington from the mess in Iraq. Whether Lebanon continues to suffocate or starts to deal with embedded and difficult issues will in part rest on a changing regional and international context.