The refugees came in a magnificent white yacht, the Michka II. Under a brilliant blue sky, the boat glided smoothly into the harbor at Larnaca, on the east coast of Cyprus. Madame Habib, the wife of the Arab shipowner, bade farewell to her new friends with a peck on the cheek. Then the 12 elegantly dressed Lebanese passengers, with their fashionable sunglasses, handbags and trolley suitcases, disembarked.

"They paid €800 ($1,245)," Mrs. Habib revealed. "Others pay twice that. Money is no object for these people -- they just want to get out of Beirut quickly and comfortably, without fleeing through Syria. They hate Syria."

Crises have always been a motor for business in Larnaca. The mainly well-heeled Lebanese who flee their country by ship are welcome guests. During the civil war in the 1970s and '80s, they caused a construction boom on the island. The record year for the tourist industry came during 2006 when the war with Israel broke out.

And now thousands have again fled by sea. The closure of Beirut airport until last Thursday and the blockade of the inland route over the border into Syria by militia left many with few other options. "History is repeating itself," says Hussein al-Shahim, a businessman from southern Lebanon who is stranded in Larnaca. "The Lebanese are masters of making our own lives hell."

The hell from which people were fleeing this time was an attack by the opposition Hezbollah militia on gentrified, government-loyal West Beirut, leading to fighting in the capital and in the Lebanese hills. There were 82 dead and 150 wounded within the course of a week, mortars, funerals, protests -- the list goes on. Hezbollah, which had been using its weapons only against Israel, was now using them as part of an internal Lebanese power struggle. Was this their own doing, or were they acting under instructions from Damascus or Tehran?

Regardless, since then a new rift has developed in the already torn Lebanon. This time it is between Sunni and Shiite Muslims, along similar lines to the situation in Iraq. There are Christians on both sides and the minority Druze religion is also split, mirroring the broader situation in Lebanon. Shahim, a Shiite, surrounded by compatriots in the lobby of his hotel in Larnaca, avoids talking about politics.

Pulling at Lebanon from all Sides

Others, meanwhile, are doing just that -- in Washington and Tehran, in the Gulf and in Egypt, in Damascus and in Jerusalem. Recent days have demonstrated all too clearly yet again the powers pulling at Lebanon from all sides, the hostilities that will be born of the situation and the abyss before which the Middle East is teetering in Beirut.

Saudi Arabian Foreign Minister Saud al-Faisal, a loyal advocate of Lebanon’s Sunni Muslims, began with the accusation that Tehran was to blame. He said the Iranian ruler’s actions in Lebanon, carried out with the help of his Hezbollah puppets, "this week affect (Iran's) relations with all Arab countries, if not Islamic states as well." Iranian President Mahmoud Ahmadinejad’s response was that Saud al-Faisal was probably just "angry." The patron of Shiite Hezbollah maintained that Iran is "the only country that does not interfere in Lebanon's internal affairs."

Events in Beirut are essentially an "internal matter" for Lebanon, added Syrian President Bashar al-Assad. Few believe his words, though, because it's all too clear that he would love to make Lebanon's affairs his own once again.

George W. Bush spoke next. The American president was actually in the region for Israel’s 60th anniversary, but he was forced, yet again, to witness the ruins of his Middle East policy. He presented his vision for the year 2068 to the Knesset, a vision that was as beautiful as it was simple, and worlds away from the sad and complicated present. In 60 years' time, according to Bush, "From Cairo and Riyadh to Baghdad and Beirut, people will live in free and independent societies. Iran and Syria will be peaceful nations ... And al-Qaeda, Hezbollah and Hamas will be defeated, as Muslims across the region recognize the emptiness of the terrorists' vision and the injustice of their cause."

And so he spoke again, this great Manichean who can only differentiate between good and evil, heroes and villains. But the situation in the Middle East has never been clear-cut, particularly as far as the complicated diplomatic tangle that is Lebanon, Iraq and the Palestinian territories is concerned.

Comparing Nasrallah to bin Laden Is Absurd

The protagonist of this latest crisis, Hezbollah leader Hassan Nasrallah, is in league with the regimes in Tehran and Damascus. However, comparing him to al-Qaida leader Osama bin Laden, as Bush did, is absurd. Lebanon's assassinated former president, Sunni leader Rafik Hariri, once said of Nasrallah, "You can do business with him," and on the day of Bush's speech, this assessment seemed to be affirmed once again. A first airplane landed at the Beirut airport from Paris on Thursday, and Nasrallah's soldiers removed their checkpoints from the roads leading to the airport. The vote for a new president, postponed 19 times since November, could also be expected within days, announced the prime minister of Qatar, who had engineered the deal. He invited the sparring parties to Doha, where they are also expected to negotiate a unity government and a new parliamentary voting law.

Hezbollah will have to make compromises in Doha, but Nasrallah has won the most important battle. The Shiite leader is no longer primarily the irreconcilable enemy of Israel and leader of the Lebanese opposition -- he is now also the leader of a state within in a state to which all of the parties are knuckling under to out of fear of another civil war.

The situation is similar for Iraqi Shiite leader Muqtada al-Sadr, who was missing from Bush's blacklist of villains this time. He also has the support of the mullahs in Tehran, sometimes unwaveringly and sometimes less so. But even al-Sadr is capable of compromise. Last week he agreed to a cease-fire with the Iraqi government -- things have not been this peaceful in Baghdad’s Shiite quarter, Sadr City, in a long time.

Bush’s al-Qaida comparison is perhaps most appropriate for the Sunni Hamas party, which bombards Israel with rocket fire day in, day out. But even here there is a difference: No one speaks to al-Qaida, but Hamas' representatives do occasionally speak to Egypt. At the start of last week, Israeli Prime Minister Ehud Olmert had a visit from Omar Suleiman, head of the Egyptian intelligence service, in order to discuss prospects for a six-month cease-fire in the Gaza Strip. The Egyptian gave a cautious thumbs-up.

The Threat of War, Hunger for Peace

One minute a bloodbath, the next a cease-fire -- the region has seldom been under such a threat of war yet been so hungry for peace. Nowhere is the tension greater than in Israel, which is simultaneously in negotiations with Syria and yet on the point of another invasion of the Gaza Strip. Shortly after the Egyptian go-between’s departure, a Grad missile hit a shopping mall in the town of Ashkelon. Until then, only a few isolated hardliners in Olmert’s cabinet were behind a new invasion of Gaza, but pressure on the prime minister increased after the attack. Defense Minister Ehud Barak and Army Chief of Staff Gabi Ashkenazi have changed their positions; both now see a full-scale military operation in the Gaza Strip as inevitable.

Since investigations began into suspect donations received by Olmert, potential successors have been lining up within the ruling Kadima Party. One of the candidates, Interior Minister Meir Sheetrit, appeared on Israeli television on Thursday following the attack, calling for large-scale military reprisals. "We will erase entire neighborhoods," threatened Sheetrit, well aware that he was echoing the feelings of most Israelis. "We will give them one day’s warning that we are going to attack their neighborhood. Then if they fail to flee, they only have themselves to blame."

Olmert said that he was still hopeful that Israel "will not need to resort to military force, which up until now has not been seriously deployed" against Hamas. He would still favor a ceasefire. But the lack of interest by the leaders in Gaza in reaching peace in the short term was already clear early in the week, when an Israeli woman was killed by a missile attack on a village on the border with the Gaza Strip.

"We will never recognize Israel!" Mahmoud al-Sahar, the most influential Hamas leader in Gaza Strip, declared at a counter-demonstration on the occasion of Israel’s birthday celebrations. He held aloft an oversized key, intended to symbolize the keys to the houses lost by Arabs in 1948, and said: "Our battle will lead to the disappearance of Israel!"

The fact that Iranian President Ahmadinejad made similar threats on the same day strengthens Israel’s feeling of being under siege -- by the Islamists of Hamas in the south and by Lebanon in the north, where Hezbollah is now stronger than ever before. And behind both stand the mullahs in Tehran, providing money, weapons and a voice on the world stage.

Even if the conflicts to the north and south can be stemmed without recourse to war, a military confrontation with Iran is considered as good as inevitable. Few ministers still believe that sanctions can prevent Iran from producing nuclear weapons. There is considerable anger in Jerusalem towards Austria and Switzerland, who have signed gas supply agreements with Tehran. Germany too has been severely criticized -- Israel’s view is that it has made only minimal restrictions to its trade with Iran.

It is essentially the upcoming end of the Bush era and the attached uncertainty as to what will come after it that is making the situation in the Middle East so unpredictable. Every conversation with "terrorists and radicals" would be little more than appeasement, warned the US President: "as if some ingenious argument will persuade them they have been wrong all along."

This was how Bush, sticking to his line until the end, voiced his disagreement with Israel’s negotiations with Syria and at the same time contradicted likely presidential candidate Barack Obama, who has made it clear that he will be prepared to negotiate with Tehran.

His words were also a rebuff to his own Defense Minister Robert Gates, who the previous day had called for a new approach to Iran. The United States may have missed good opportunities to enter into dialogue with the mullahs and must now construct a combination of incentives and pressure in order to gain concessions from Iran, he said.

"If there is going to be a discussion, then they need something, too," Gates said. "We can't go to a discussion and be completely the demander, with them not feeling that they need anything from us."

His words are a departure from Bush's political line and seem to represent a broadening, however vague, of the US outlook. Gates' view of the situation is not quite as rosy as Bush's vision of a democratic Middle East in 2068 -- which makes it a whole lot more realistic.