BEIRUT, Nov 8: Lebanon, backed by Syria, on Wednesday put a spoke in the wheels of Washington’s anti-terrorism campaign by refusing to freeze the assets of its Hezbollah movement.

Even if Beirut’s response was predictable, it is the first time that a country has rejected such a US demand so clearly since the Sept 11 attacks on New York and Washington.

“This demonstrates that for the moment there are limits to American action in the Middle East,” a Western diplomat said.

Lebanon’s reply was officially delivered by Prime Minister Rafiq Hariri to US Ambassador Vincent Battle, who said afterwards he had been told Beirut would continue to insist on distinguishing between resistance and terrorist organizations.

“We made a formal request on Friday with the ministry of foreign affairs that there be cooperation for the freezing of assets,” he told reporters after meeting with Hariri.

He said the Central Bank of Lebanon and its special investigative committee “has been working very hard over many, many weeks” to check the records of Lebanese commercial banks for traces of groups proscribed earlier.

Battle said the action was meant “to determine whether there are any assets that need to be frozen so it is not a question of immediate, it is a very, very long and technical exercise.”

Washington announced on Friday that Hezbollah was on a new list of 22 “terrorist” organizations whose assets should be frozen as part of the US-led war on terror.

Earlier on Wednesday, parliament Speaker Nabih Berri said he had informed Battle that “the resistance in Lebanon and the intifada in Palestine are not terrorist but, on the contrary, constitute war against the terrorism represented by Israeli occupation.”

Hezbollah, which spearheaded the war that drove Israel out of southern Lebanon in May 2000, is still leading a guerrilla campaign against Israeli troops in the disputed Shebaa Farms area, captured from Syria in 1967 and now claimed by Beirut.

But Hezbollah is also a political movement, with nine members of parliament and overwhelming control, along with Amal, of municipalities in southern and eastern Lebanon.

Before seeing Battle, Hariri had an hour’s meeting in Damascus with Syrian President Bashar al-Assad, followed by talks in Beirut with Berri and President Emile Lahoud.

In a speech later on Wednesday at a Beirut hotel, Hariri said Lebanon’s stance was clear and not isolated. It therefore “has nothing to fear”.

But Battle said he regretted the “change” in Lebanon’s cooperation with regard to Osama bin Laden, and analysts said Beirut’s rebuff to Washington could have damaging economic consequences.

Lebanon, which has a huge 25 billion dollars of state debt, has still been unable to secure substantial aid for the reconstruction of the south since the Israeli withdrawal, because of its refusal to curb Hezbollah’s continuing campaign against Israel.

Battle’s statement that the latest US blacklist will not be submitted to the UN Security Council means that Beirut cannot be accused of defying the United Nations.

And Hariri also has sympathy from France, the former colonial power in Lebanon and its chief Western ally. Ambassador Philippe Lecourtier insisted on Wednesday, after seeing the prime minister, on the closeness of their links, adding that Hariri would be seeing President Jacques Chirac on Saturday. —AFP