It is comforting to put familiar labels on unknown things. The notion of state-sponsored terrorism is one such label. People imagine terrorists as puppets of evil states waging proxy wars. Things are much worse.
The United States learned the painful lesson with the Afghan mujahedin, and Israel with the South Lebanon Army: guerillas welcome your money but not your orders. Money buys virtually no control. Guerillas take money to do things they would do anyway, if on a smaller scale. Stopping funding prompts guerillas to find alternate sources like drugs, rackets, and smuggling, but not to dissolve. Unlike regular armies, guerillas are highly motivated and adventurous. They fight and fund in unorthodox ways. They can survive on very little money, especially in areas saturated with weapons, where the weapons can be bought cheaply or grabbed from a regular army or the police with little resistance. In fact, financing the guerillas may be a good way to enlarge them, draw them into an open conflict, and defeat them.
States often sponsor guerillas for the immediate ends of power politics, to perform military tasks where states prefer to remain formally uninvolved. Sometimes, sponsorship amounts to self-promotion. That appears to be the case with Hezbollah.
That view is consistent with Ahmadinejad’s radical anti-Israeli pronouncements. Iranian public opinion long turned away from the ayatollahs. The clerical establishment is desperate and tries failing governments’ most common option for regaining popularity: give the people an enemy. Israel gives the Iranians both an excuse for their economic and political failures and a national goal to suffer for. Iran needs Israel as a dangerous long-term enemy, not as a battlefield opponent.
An anti-Israeli stance is not dangerous: Israel hesitates to preempt even in clear and present danger, much less in the muddy Iranian situation. Anti-Israeli rhetoric draws the world’s attention to Ahmadinejad. Military opposition to Israel positions Iran as the leader of the Muslim world, a coveted spot Egypt vacated after the Camp David agreement.
Iranian sponsorship of Hezbollah is about the same as corporate logos at sports event. The sponsors do not control the teams; they just pay to advertise. Iran sent Hezbollah outdated weapons; the best are twenty-year-old Chinese Zelzal-2 missiles. Iranian remittances to Hezbollah are insignificant compared to US and EU aid to PLO- and Hamas-run Palestine. Hezbollah uses most Iranian funds for hospitals and other charitable institutions in Lebanon. Iranian funding is not critical to Hezbollah.
Iran cannot stop Hezbollah. Israel confronts an independent guerilla group unconcerned about retaliation or foreign public opinion. Hezbollah, unlike the PLO, is perfectly assimilated into the Lebanese milieu. Uprooting such a group is immeasurably more difficult than fighting a state. The possibility of manipulating Hezbollah by influencing Iran is limited. Israel can force Iran to stop missile shipments to Hezbollah and punish Iran for prior shipments.