Hezbollah has spent the past three months preparing for possible renewed fighting with Israel, backed by fresh funding from Iran, Lebanese security sources told Reuters on October 26. One Lebanese security source and a source close to the group said Hezbollah had received “tens of millions of dollars” from Tehran to rebuild its military capabilities. Separately, about $200 million from Iran was earmarked earlier this month for displaced families in Hezbollah’s Shi’ite heartlands.

According to the sources, the group is focused on procuring explosives, producing drones that can be flown into Israeli positions, and rebuilding command-and-control structures that broke down in key battles. Hezbollah has acknowledged that explosives seized by Lebanese authorities this month were its own. It denied that its command structure had broken down.

Hezbollah, founded by Iran’s Revolutionary Guards in 1982, has lost thousands of fighters, many of its leaders and much of its arsenal in two wars with Israel since 2024. The most recent began on March 2, when it opened fire in support of Tehran. The Israeli offensive that followed killed more than 4,000 people in Lebanon and displaced about a quarter of its population.

Analysis: the proxy comes first

The timing is telling. This month the dollar passed 265,000 tomans on Tehran’s open market, the president listed failures in electricity, water, fuel and pensions, and 44 million Iranians, roughly half the population, are being screened for extra food credits. The money for Hezbollah comes from the same state.

For the Revolutionary Guards, Hezbollah is not foreign aid. It is the regime’s forward line of defense and its most valuable proxy, and rebuilding it is treated as a security priority rather than a budget choice. When the leadership has to choose between a militia in Lebanon and its own citizens’ purchasing power, the militia comes first.

The same money also tells Lebanese what Tehran is buying: drones and explosives for another war, in a country where the last one displaced a quarter of the population.