...When we met in his office, before this new battle with Israel, Nasrallah claimed to see peaceful political activism as Hezbollah's future.

"We have ministers, we have members of parliament, we have municipal council members, leaders of unions and syndicates," he boasted as we sat on faux French brocade furniture at his now-bombed headquarters. "If we are maintaining our arms until now, this is due to the fact that the need for it is still there, due to the permanent or constant Israeli threats against Lebanon. Whether we keep on with the resistance or stop the resistance, we are effectively now a full-fledged political party."

The outskirts of Beirut are known as the dahiya , Arabic for "suburbs." It has come to mean the poor, dense and sometimes dangerous maze of slums that is also Hezbollah-land. Its dirty alleys are crammed with concrete-block shanties. Gnarled masses of wire run from one building to the next, illegally tapping into electrical, phone and television lines. While lights burn brightly in trendy downtown Beirut, the dahiya is often eerily dark because of sporadic electricity.

Hezbollah has become an enterprise in the dahiya, often outperforming the state. It runs a major hospital as well as schools, discount pharmacies, groceries and an orphanage. It runs a garbage service and a reconstruction program for homes damaged during Israel's invasion. It supports families of the young men it sent off to their deaths. Altogether, it benefits an estimated 250,000 Lebanese and is the country's second-largest employer.

In the dahiya, Nasrallah is an icon, famed for his oratory and revered as a champion of Lebanon's long-dispossessed Shiite minority...