The sudden opening on July 12 by Lebanon’s Hezbollah militia of a second front in Israel’s ongoing campaign against Hamas militants in Gaza presents the Bush administration with an escalating crisis that, until now, it has preferred to ignore.

The immediate question it faces is whether to maintain its strong backing for military action by Israeli Prime Minister Ehud Olmert or to engage in active diplomacy to prevent any further escalation and to end the violence.

That the stakes are extraordinarily high was made clear not only by Olmert’s decision to send the Israel Defense Forces (IDF) into Lebanon for the first time since Israel’s withdrawal in 2000, but also by a White House statement issued July 12 that promised to hold Syria and Iran “responsible for (the Hezbollah) attack and the ensuing violence.”

“This is potentially very dangerous,” Bassel Saloukh, a political scientist at the Lebanese American University in Beirut, said in a telephone interview. “If the Americans take this to legitimate a strike against Iran or Syria, then I think it will escalate with devastating consequences.”

For the past two weeks, Washington has mostly stood on the sidelines as Israeli forces have carried out military operations in Gaza, including the destruction of a U.S.-financed power plant and several other infrastructure targets, in what has so far been a futile quest to force Hamas to release an IDF corporal seized by militants during a raid on an Israeli border post in late June.

Those operations, which have so far resulted in the deaths of more than 50 Palestinians and one Israeli soldier, have worsened what was already a deteriorating humanitarian situation in Gaza. Arab governments and some human rights groups have called Israel’s offensive a disproportionate act of “collective punishment” against the civilian population.

The Bush administration has urged restraint on all sides, but its support of Israel’s demand for its soldier’s release and its rejection of Hamas’s appeals for a ceasefire and for negotiations for a prisoner swap have been seen in the region as giving Olmert virtual carte blanche to pursue his offensive.

“The combination of our own diplomatic disengagement, our blaming Syria and Iran, and our giving the Israelis a green light [for its military campaign] has inflamed the entire region,” said Clay Swisher, a former State Department Middle East expert and the author of The Truth about Camp David, who just returned from Lebanon last week.

It was in this context that Hezbollah shelled Israeli civilian and military targets and attacked an IDF border patrol on July 12, reportedly killing seven IDF soldiers and abducting two others, effectively creating a second front along Israel’s northern border.

Hezbollah leader Sheikh Hassan Nasrallah told a press conference a short time later that his group was prepared to hand over its two captives and the soldier held by Hamas in exchange for the release of dozens of Lebanese detainees, as well as hundreds of Palestinian prisoners as previously demanded by Hamas, held by Israel. “If the Israeli enemy wants escalation,” he warned, “we are ready for the confrontation.”

But Olmert, declaring the attacks “an act of war,” launched an air, sea, and ground assault in southern Lebanon designed, as in Gaza, to press Hezbollah-and the Lebanese government of which it is a part-to return the Israeli captives unconditionally. In the early fighting, Israeli warplanes reportedly destroyed three bridges, while the IDF chief of staff, Lt. Gen. Dan Halutz, threatened to “turn back the clock in Lebanon by 20 years,” if his soldiers were not returned.

Michael Hudson, a Middle East expert at Georgetown University, said that Hezbollah’s intervention was well-timed to take advantage of the growing anger in the region over Israel’s campaign in Gaza and Washington’s support for it, not to mention the deteriorating situation in U.S.-occupied Iraq.

“Hezbollah has inserted itself once again at a very opportune moment in the Israeli-Palestinian struggle,” Hudson said. “The attack is a very dramatic and substantial escalation of the whole regional situation and undoubtedly lifts Hezbollah’s stock throughout the Arab-Islamic world.”

Washington, which was clearly caught off guard by Hezbollah’s move, responded twice in the course of the day. In a statement released in Paris, Secretary of State Condoleezza Rice charged that Hezbollah’s action “undermines regional stability” and called on all parties to “act with restraint to resolve this incident peacefully and to protect innocent life and civilian infrastructures.”

“Syria,” she said, in an apparent reference to Damascus’ historic backing for Hezbollah, “has a special responsibility to use its influence to support a positive outcome.”

In a more ominous statement several hours later, however, a White House spokesman issued the statement warning that Syria and Iran, which have also been major sponsors of Hezbollah, would be held “responsible” for the attack and its consequences.

The two statements appeared to highlight the choice now faced by the administration-whether to treat the current crisis as something that can be resolved through quiet diplomacy and mediation involving primarily local actors, including Israel, the Palestinians, and Hezbollah, with help from Damascus, or as part of a larger regional confrontation between the United States and Israel, on one side, and Syria, Iran, and various non-state actors on the other, in which case a wider regional conflict is more likely. Hudson, who stressed that Syria and Iran’s roles, if any, in encouraging Hezbollah to attack, were “entirely speculative,” said Damascus and Tehran “may have calculated that, with the Israelis now engaged in a two-front war, and with the Americans bogged down in Iraq, neither is prepared for any major military adventures.”

He also suggested that Tehran, if it did give Hezbollah a green light for such an attack, may be trying to demonstrate its “strategic reach”-how much difficulty for Israel and the United States it can create-at a moment when Washington is trying to rally Europe, Russia, and China behind the UN Security Council if Tehran fails to accept a U.S.-backed plan that would freeze its nuclear program.

“If Washington wants to go down that path, then it will use this as a pretext to hit Iran in order to contain it and nip its regional ambitions in the bud,” said political scientist Saloukh. If, on the other hand, Washington “interprets this as an instrumental strategy by Hezbollah to free Lebanese and Arab prisoners in Israeli jails, then there’s room for negotiation.”

As hinted by the difference in the statements made by Rice and the White House, the choice may provoke a major fight within the administration, particularly between State Department officials-who have long argued in favor of a more active and even-handed U.S. role in trying to revive an Israeli-Palestinian peace process-and Elliot Abrams, Bush’s senior Mideast adviser on the National Security Council staff, who, according to Chris Toensing, director of the Middle East Research and Information Project, “has been inclined to give Israel fairly free rein.”

Until now, Rice has generally deferred to Abrams on Israel-Palestinian issues, but with the conflict threatening “to become a regional conflagration, the administration may be forced to consider a different approach,” he said.

Americans for Peace Now (APN), a predominantly Jewish group that supports negotiations between Israel and the Palestinians, also appealed Wednesday for the administration “to resume active U.S. diplomacy to help bring this spreading violence under control.”

“It should be clear to the White House at this time that t

he Palestinian situation is not unfolding in a regional vacuum,” said APN President Debra DeLee.

Jim Lobe is the Washington bureau chief of the Inter Press Service and a Right Web contributing writer.