US envoy in ceasefire talks, Israel targets shadow bank

Branches of the Hezbollah-run Qard al-Hassan have been targeted by Israeli strikes in Lebanon. (AP PHOTO)

A US envoy will hold talks with Lebanese officials in Beirut on conditions for a ceasefire between Israel and Hezbollah, while Israel struck branches across Lebanon of what it describes as Hezbollah's shadow bank.

Diplomacy has failed to cool down Israel's conflicts with its two most dangerous and heavily armed regional militia foes - Hezbollah in Lebanon and Hamas in the Palestinian Gaza Strip - which are grinding into a second year.

Washington is hoping for a new push for peace in the Middle East following Israel's recent killing of Yahya Sinwar, leader of Hamas and architect of the attacks on Israeli towns in 2023 that precipitated Israel's assault on the Gaza Strip.

US officials are seeking to broker a truce in Lebanon, where Israel launched a ground campaign over the past month and has killed most of the senior leadership of Hezbollah, an Iran-backed militia which says it is fighting Israel on behalf of the Palestinians.

Documents of al-Qard al-Hassan scattered at site of Israeli strike
Families fled homes near branches of Hezbollah's Qard al-Hassan after Israel warned of strikes.

Overnight, Israel attacked sites in Beirut, southern Lebanon and the Bekaa valley, targeting the branches of an alternative banking system that Israel says is run by Hezbollah to finance its operations.

Hundreds of families fled homes near the targeted locations ahead of the strikes, though no casualties were immediately reported.

Reuters saw plumes of black smoke billowing in the air after at least 10 blasts in Beirut suburbs. Panicked crowds clogged streets and caused traffic jams in some parts of the city as they tried to get to neighbourhoods thought to be safer.

"Strike, strike, strike with planes and drones, and we don’t know who they are targeting and who will die each day," said Micheline Jabbour, who works in a Beirut pastry shop.

The Israeli military said before its overnight attacks that it was targeting the Al-Qard Al-Hassan Association, an alternative to the Lebanese banking system which the US has said is used by Iran-backed Hezbollah to manage its finances.

The association has more than 30 branches across Lebanon including 15 in densely populated parts of central Beirut and its suburbs.

There was no immediate statement from the organisation, Hezbollah or the Lebanese government.

US envoy Amos Hochstein is set to meet Lebanon's caretaker prime minister Najib Mikati and speaker of parliament Nabih Berri on Monday. Berri told the Al-Arabiya broadcaster over the weekend that Hochstein's visit was "the last chance before the US elections" to reach a truce.

But Berri said would reject any changes to the agreement which ended the last major war between Hezbollah and Israel in 2006.

Flames and smoke from an Israeli airstrike on Dahiyeh in Beirut
Lebanese officials will meet with a US envoy over possible terms of an Israel-Hezbollah ceasefire.

Beirut residents said they had little expectation that the US official's visit would bring a breakthrough.

"It's all a waste of time. Will he be able to get rid of Hezbollah's weapons? Hochstein? He won't be able to do anything," said Tony Rawandos, 61, owner of a car workshop.

Israel's military has not slowed down its offensives and is also preparing to retaliate for an Iranian missile barrage earlier in October, though Washington has pressed it not to strike Iranian energy facilities or nuclear sites.

Iran has complained to the UN nuclear watchdog about Israel's threats against its nuclear sites, foreign ministry spokesperson Esmaeil Baghaei said on Monday at a weekly news conference.

The US military has rushed its advanced anti-missile system to Israel, which is now "in place", US Defense Secretary Lloyd Austin said during a trip to Kyiv.

Austin declined to say whether the Terminal High Altitude Area Defense system, or THAAD, was operational. But he added: "We have the ability to put it into operation very quickly and we're on pace with our expectations."

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