On Tuesday, August 26, 2025, a new chapter in Lebanon’s long-running political saga unfolded as the United States floated a bold—some say improbable—proposal: the creation of an economic zone in southern Lebanon. According to Al Jazeera, the plan was presented by US envoy Thomas Barrack during his visit to Beirut, with the stated aim of incentivizing the Lebanese government to press ahead with disarming Hezbollah, the powerful Iran-backed militia and political party that has long dominated Lebanese security and politics. The proposal, however, has been met with deep skepticism from nearly every quarter in Lebanon, raising questions about its feasibility and the real intentions behind it.
“We, all of us – the Gulf, the US, the Lebanese – are all going to act together to create an economic forum that is going to produce a livelihood,” Barrack told journalists, hinting at a coalition of international backers but offering little in the way of concrete details. The idea, as outlined by Barrack, seems to draw inspiration from similar economic zones in Jordan and Egypt—countries that, crucially, have normalized relations with Israel. Lebanon, by contrast, remains in a state of war with its southern neighbor, especially after the devastating conflict that raged from October 8, 2023, until a ceasefire was declared on November 27, 2024.
The Lebanese government, which took office in January 2025, has found itself under intense pressure from both the US and Israel to rein in Hezbollah. The group’s military capabilities were severely tested during the 2023-2024 war, with Israel reportedly assassinating several of its leaders and inflicting significant battlefield losses. Regional setbacks have further weakened Hezbollah’s position; the fall of Syrian President Bashar al-Assad in December 2024 and US-backed Israeli attacks on Iran in June 2025 have eroded the support network that once sustained the so-called “axis of resistance.”
Domestically, Hezbollah’s standing has also taken a hit. Once lauded as Lebanon’s primary defense against Israeli aggression, the group’s reputation has suffered over the past two decades. Its armed takeover of Beirut in 2008, intervention in Syria on behalf of Assad’s regime, and opposition to the 2019 Lebanese uprising have alienated many outside its core constituency. Even some longtime political allies, such as the Free Patriotic Movement and former presidential candidate Sleiman Frangieh, have shifted their tone, expressing support for disarmament in favor of consolidating power in the hands of the Lebanese state.
Yet, Hezbollah remains defiant. “We will not abandon the weapons that honour us nor the weapons that protect us from our enemy,” declared Hezbollah Secretary-General Naim Qassem in a speech on August 25, 2025, as reported by Al Jazeera. He went on to criticize the government’s ability to safeguard Lebanon’s sovereignty, stating, “If this government continues in its current form, it cannot be trusted to safeguard Lebanon’s sovereignty.”
The trauma of the recent war lingers heavily in southern Lebanon. Israeli military actions killed more than 4,000 people and displaced over a million, according to Al Jazeera. Despite the ceasefire’s terms, Israel continues to occupy at least five points in the south and has rendered large swathes of the region uninhabitable through intensive bombing and the use of white phosphorus. Thousands remain unable to return home, and the psychological scars run deep. “People in south Lebanon are still traumatised by the recent war,” Lebanese political analyst Karim Emile Bitar told Al Jazeera, suggesting that this collective trauma will make any US-backed economic initiative a tough sell.
Analysts believe the US proposal is intended to entice Lebanese citizens—particularly those in Hezbollah’s support base—to pressure the government for disarmament. Barrack himself raised the question: “We have 40,000 people that are being paid by Iran to fight. What are you going to do with them? Take their weapon and say: ‘By the way, good luck planting olive trees’?” The plan, reportedly first discussed between Israeli Strategic Affairs Minister Ron Dermer and Barrack in Paris, envisions state-owned Lebanese factories near the Israeli border. But as Al Jazeera notes, details remain scant, and the concept faces both practical and political hurdles.
Joseph Daher, author of Hezbollah: Political Economy of the Party of God, pointed out that while Jordan and Egypt have qualifying industrial zones (QIZs) that require Israeli inputs, these only function because both countries have normalized relations with Israel—something most Lebanese would vehemently reject. Yasser Elsheshtawy, an adjunct professor at Columbia University, warned that such zones can become isolated enclaves, displacing local communities and causing environmental harm. “In many instances, they play a role in the abuse of workers’ rights as the right for forming unions is typically prohibited,” Elsheshtawy told Al Jazeera.
Trust, or the lack thereof, is perhaps the greatest obstacle. “I don’t see any desire or buy-in,” said Lebanese analyst Michael Young. “If it ever takes off, there will be buy-in, but all this is very premature.” Many Lebanese view the US as anything but an honest broker, especially after Washington’s perceived failure to restrain Israeli military actions in Lebanon, Gaza, and Syria over the past two years. Qassem Kassir, a political analyst close to Hezbollah, summed up the prevailing sentiment: “The idea is rejected because there is no trust in America.”
Still, some analysts argue that Lebanon has few alternatives. “The process of normalisation will take time to be imposed but is moving forward de facto, … so it is more about dealing with the situation as it is and the lack of political alternatives,” Daher told Al Jazeera. The US proposal, he said, could offer “oxygen” to Lebanon’s struggling economy, but “it still needs to overcome a series of obstacles, and the major obstacle today is psychological. There is a lack of trust.”
Amid this uncertainty, Lebanese politics remain in flux. On Sunday, September 1, 2025, Speaker of Parliament Nabih Berri—an influential Shiite leader and Hezbollah ally—called for “calm and consensual dialogue” over the fate of Hezbollah’s weapons, according to Naharnet. The Lebanese government, under heavy US pressure, has tasked the army with drawing up a plan to disarm Hezbollah by the end of the year. Hezbollah and its Shiite allies have strongly opposed this move, with their ministers walking out of a recent cabinet session in protest.
Berri, commemorating the 1978 disappearance of Amal founder Imam Moussa al-Sadr, criticized the government’s approach, describing the US-backed plan as going “beyond the principle of (a state) weapons monopoly, and rather appears as an alternative to the November ceasefire agreement.” He reiterated his openness to dialogue but rejected any talks held “under threats” that might undermine the fragile truce. Lebanese ministers are set to meet again on Friday, September 5, 2025, after receiving the army’s disarmament plan.
Meanwhile, violence continues to flare along the border. Even after the November ceasefire, Israel has kept its troops at five strategic points in southern Lebanon and has conducted fresh strikes against Hezbollah targets, as reported by Naharnet. Each new incident deepens public mistrust and complicates the prospects for a negotiated settlement.
For now, Lebanon faces a crossroads: a controversial US economic proposal, mounting international pressure, and a deeply divided domestic landscape. Whether these forces will converge to produce peace and prosperity—or simply more uncertainty—remains to be seen.
