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By Tom Perry and Laila Bassam
BEIRUT (Reuters) - A decision by Sunni Muslim leader Saad al-Hariri to step away from Lebanese politics opens the way for Shi'ite Hezbollah to extend its already deep sway over the country, rendering it ever more a bastion of Iranian influence on the Mediterranean.
Three times prime minister, Hariri https://www.reuters.com/world/middle-east/lebanons-hariris-turbulent-career-politics-2022-01-24 declared on Monday he would suspend his role https://www.reuters.com/world/middle-east/lebanons-hariri-expected-announce-election-boycott-party-members-say-2022-01-24 in public life and boycott a general election in May, citing Iranian influence as one of the reasons he saw little hope of positive change.
It opens a new phase in Lebanon's sectarian politics, governed by a system of power-sharing among its many sects, and adds to the uncertainties facing a country suffering a financial meltdown https://www.reuters.com/markets/rates-bonds/how-bad-is-lebanons-economic-meltdown-2022-01-23 that marks the biggest threat to stability since a 1975-90 civil war.
Hariri's move will accelerate the fragmentation of the Sunni community which his family dominated for 30 years with Saudi support, before Riyadh cut him off, abandoning a Lebanon policy that had cost billions but failed to curb Hezbollah.
Founded by Iran's Revolutionary Guards in 1982 and heavily armed, Hezbollah has long been Lebanon's strongest faction, gradually establishing the country as one of several Arab states where Iran's Shi'ite Islamist government wields major sway and making Lebanon a theatre of its struggle with Gulf Arab states.
Stronger financially than most in Lebanon, Hezbollah https://www.reuters.com/world/middle-east/what-is-lebanons-hezbollah-2021-09-16 is well positioned to capitalise on Hariri's retreat. A source familiar with Hezbollah's thinking said the group is already eyeing potential gains for its allies in the Sunni community, typically local politicians lacking the national sway of Hariri's party.
But Hezbollah is also wary of new challenges, including the risk that local and regional adversaries will seek to replace Hariri with more hawkish figures who will seek confrontation rather than strike compromises the way he did in recent years.
Hariri's political earthquake is set against the backdrop of an escalation in the wider struggle between Iran and U.S.-allied Gulf Arab states. The Iran-aligned Houthis have launched two rocket attacks on the United Arab Emirates this month.
The UAE belongs to a Saudi-led coalition fighting in Yemen that says Hezbollah is aiding the Houthis.
On Saturday, a Gulf Arab envoy https://www.reuters.com/world/middle-east/kuwait-minister-says-he-presented-suggestions-lebanon-rebuilding-trust-2022-01-23 handed the Lebanese government a list of conditions for thawing ties which a Lebanese diplomatic source said included setting a time frame for the implementation an 18-year-old U.N. resolution that requires Hezbollah's disarmament.
Political sources say the demand was seen in Beirut as an escalation by Gulf states that expelled Lebanese ambassadors in October in a rift over criticism of the Yemen war by a Hezbollah-aligned minister.
The list, described by the Gulf envoy as confidence-building proposals, also echoed Western demands for the election to be held on time.
But with the Sunni political scene in disarray, some analysts expect calls for a postponement.
Many observers believe this would suit all major players apart from Hezbollah's adversaries who include the Christian Lebanese Forces, a Saudi-aligned party which hopes the majority Hezbollah won with its allies in 2018 can be overturned.
"If the big powers in Lebanon including Hezbollah think it is in their interest to delay the elections, they will do so," said Nabil Boumonsef, deputy editor-in-chief at Annahar daily.
If the election happens, the subsequent horse-trading over a new government is likely to be even more difficult than usual.
This uncertainty does not bode well for the chances of government action to tackle the economic crisis https://www.reuters.com/world/middle-east/lebanese-govt-revenues-fell-by-nearly-half-2021-world-bank-says-2022-01-25 which the ruling elite has left to fester since 2019.
Hariri's decision has turned an already complicated electoral landscape on its head.
Dozens of parliament's 128 seats will be affected.
It won't only affect the 20 seats his Future Movement won in 2018, but many more won by other groups in local alliances with Future. There is currently no Sunni with the kind of country-wide network maintained by Hariri, who lost a third of his seats in 2018 but maintained his position as the leading Sunni.
'A FREE HAND'
One of his brothers, Bahaa, may run or back candidates, but has yet to announce his plans. Bahaa has criticised Saad over his accommodations with Hezbollah.
Druze politician Walid Jumblatt told Reuters Hariri's step meant "a free hand for Hezbollah and the Iranians".
Hezbollah-allied Sunnis won seats from Future in 2018.
But the situation may not be so clear cut for Hezbollah, designated a terrorist group by the United States.
For while Hariri's early career was defined by confrontation with Hezbollah, culminating in a brief civil war in 2008, he later made compromises that suited the group and its allies.
In his speech on Monday, Hariri said his compromises had avoided civil war.
"I am not so sure how happy Hezbollah is" with Hariri's decision, said Heiko Wimmen of International Crisis Group.
"It is in Hezbollah's interest to have at least the outward appearance of a functioning political system where everyone is involved, including the Sunnis."
(Writing by Tom Perry, Editing by William Maclean)