ISRAEL said last night that it would veto the presence in Lebanon of peace-keeping forces from nations with which it does not have diplomatic links.

Ehud Olmert, the Prime Minister, ruled out countries that do not recognise Israel, complicating the already difficult task of assembling 15,000 troops to oversee the United Nations’ ceasefire resolution and bolster Lebanese forces.

Malaysia, Indonesia and Bangladesh — Muslim states that do not have diplomatic links to Israel — are among the few countries that have offered troops for the stabilisation force that is expected to be led by European troops.

Israeli ministers had earlier suggested barring countries with which it did not have ties, but Foreign Ministry officials said that it was still a matter of discussion. Last night, at a meeting of the Israeli Cabinet’s security committee, Mr Olmert excluded those countries.

“We will not agree that countries which do not have relations with Israel will participate in the multinational force,” an official quoted the Prime Minister as saying.

Mr Olmert last night asked Italy to lead a UN force in Lebanon and to deploy troops to oversee Lebanon’s border with Syria, his office said. Romano Prodi, the Italian Prime Minister, said his country intended to send a significant military force.

Israel’s Foreign Ministry said that it was vital that any element of the peace-keeping force on its border could conduct dialogue with all the parties to the ceasefire agreement.

The key factor in the success of the ceasefire is the creation of a buffer zone from the Litani river in Lebanon to the Israeli border.

The zone would be patrolled by a force of 15,000 Lebanese troops, which are already deploying, and an equal number of UN peace-keepers.

France, which had earlier offered to send thousands of troops and lead the operation, has balked at the mission. At the weekend 49 French military engineers disembarked at the UN’s headquarters at Naqoura in southern Lebanon.

By the end of the week they will be joined by another 150 French troops, who set off by ship from France yesterday. But the reinforcements are woefully inadequate and European Union foreign ministers are due to meet later this week to search for other volunteers.

Earlier Mr Olmert had unveiled plans to boost funding for the north of the country, which was ravaged by four weeks of deadly Hezbollah rocket strikes that drove a million people from their homes and into bunkers, crippling the economy. Mr Olmert, under pressure for mismanaging the conflict, said that he would head a special committee to revive the region’s battered fortunes and consider establishing a panel to review the Government’s handling of the crisis.

Lieutenant General Dan Halutz, Israel’s army chief, conceded yesterday that his troops had failed to deliver Hezbollah a knock-out blow. Gains were made in the 34-day conflict, but the outcome was not a widely regarded victory.

Another commission of inquiry headed by Amnon Lipkin-Shahak, the former army chief, began investigating the army’s preparations and conduct of the conflict yesterday.

The commission has begun drawing up a witness-list of those to be questioned. Reserve soldiers have complained bitterly about a shortage of weapons and body armour, and poor logistical planning that left troops hungry and thirsty.

• Haim Ramon, the Israeli Justice Minister, resigned as expected last night after being charged with sexual harassment on Thursday.

THE RESOLUTION

United Nations Security Council Resolution 1701, which brought five weeks of fighting to a halt in southern Lebanon, is deliberately phrased to allow Israel to take defensive military action.

The key paragraph calls for “the immediate cessation by Hezbollah of all attacks” and “the immediate cessation by Israel of all offensive military operations”.

Israel insists that its raid deep into Lebanon’s Bekaa Valley on Saturday was defensive in nature because it was intended to disrupt the supply of arms from Syria to Lebanon. It also pointed out that the resolution demands that such arms supplies are halted.

Kofi Annan, the UN Secretary-General, and the Lebanese Government insisted over the weekend that the attack was a violation of the UN resolution because it was offensive. They gave a warning that it threatened to unravel the ceasefire agreement.

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