August 16, 2006 -- IGNORE Israel's and Hezbollah's boastful claims of
victory in their bitter, but largely inconclusive war. The real winner of
the month-long conflict is neither - it's Iran.

In Israel, Prime Minister Ehud Olmert's Kadima government teeters on the
edge of collapse from a questionable military strategy that failed to finish
off Hezbollah-or even end its rocket barrages after over 30 days.

On the other side of the border in Lebanon, Hezbollah will (regrettably)
live to fight another day. But many of its fighters have been killed, and
its terrorist infrastructure and military arsenal are in tatters.

As such, it's hard for either side to chalk one up in the "win" column. But
that isn't the case for Hezbollah's Sugar Daddy, Iran, which clearly
profited from the death and destruction in Israel and Lebanon.

In fact, though roundly criticized at the conflict's outset for spurring
Hezbollah into provoking a war, in the end, Iran actually burnished its
image and elevated its standing in the Middle East - and the Muslim world.

Result? An increasingly confident Iran is going to be one tough customer to
deal with in the days and months ahead.

Think about it: Using its terrorist proxy, Hezbollah, Iran was able to lash
out at arch-enemy Israel, causing the Israeli Defense Forces to fight a
two-front war in Gaza and Lebanon.

Tehran also benefits from the severe damage done to America's public image
in the Muslim world, where Washington was (inaccurately) seen as supporting
- and directing - the destruction of not Hezbollah, but Lebanon.

Iran was able to divert a lot (but not all) of world attention from its
still-active nuclear (weapons) program, too, giving it plenty of breathing
room to continue to enrich uranium for nukes with impunity.

The Israel-Hezbollah war also put any prospects of advancing the Middle East
peace process between Israel and the Palestinians - a concept the mullahs
have long opposed - into a deep freeze.

The conflict unsteadied global oil markets, pushing prices to record levels.
The price spike has been filling Tehran's coffers and keeping the poorly
managed Iranian economy afloat.

All in all, surveying the strategic landscape in the aftermath of the war,
Iranian President Mahmoud Ahmadinejad and senior cleric Ayatollah Ali
Khamenei must be darned pleased with themselves.

So what does all this mean for the future? More trouble.

You can bet that Tehran isn't going to cave to the international community
on ending uranium enrichment - or its nuclear program - when it's scheduled
to respond to the U.N. on Aug. 31.

This means we'll soon be facing another crisis as the United States, France
and Britain square off against China and Russia at the U.N. Security Council
over hitting Iran with economic sanctions.

After the slog in Lebanon, you can bet Iran no longer fears an air strike by
the previously invincible IDF - and Tehran won't worry about a dustup with
the United States, considering the challenges in Iraq and Afghanistan.

Tehran will also deepen its political and security relationship with
Damascus, continuing to use Syria to smuggle arms and other aid to Hezbollah
in the aftermath of the "cease-fire."

Further, feeling it can act without consequence, Tehran will step up its
campaign against U.S. forces in Iraq, using Shia militias and Iranian
paramilitary forces. It will expand its influence in Afghanistan, too.

Awash in profits from $70-plus barrels of oil, Iran will continue to
underwrite the Hamas-led Palestinian government and help keep Hezbollah
humming along as "a state within a state." The pricey energy market will
also allow Iran to improve its conventional military. It signed a $1 billion
arms contract with Russia this year; look for more Russian and Chinese arms
sales.

Flush from success in Lebanon, Iran might feel comfortable exporting its
fundamentalism to other parts of the Muslim world, including Saudi Arabia
and the pro-Western Gulf states with restive Shia populations.

And how about Ahmadinejad's budding friendship with Venezuelan troublemaker
President Hugo Chavez?

It's easy to conclude that the outcome of this war resulted in losers - and
bigger losers. But, in reality, some, including Iran, have benefited from
the carnage and chaos.

As a result, we're faced with a "pumped-up" Iran that will likely use its
new-found standing to be even more aggressive, and intransigent, than ever
in pursuing its interests at our expense.

Heritage Foundation senior fellow Peter Brookes is the author of: "A Devil's
Triangle: Terrorism, WMD and Rogue States." peterbrookes@heritage.org