"The dialogue has good prospects for the simple reason that the government doesn't have many options at this point," said Oussama Safa, head of the Lebanese Centre for Policy Studies.

The Arab mediators flew to Beirut on Wednesday to try to halt the bloodiest fighting among Lebanese since the 1975-90 civil war. At least 81 people were killed and 250 wounded.

The conflict is linked to a wider contest pitting the United States and Saudi Arabia against Iran and Syria, which both back Hezbollah, a powerful Shi'ite Islamist group determined to keep its arms to fight Israel -- to the alarm of many other Lebanese.

Even if a deal is patched up in Doha, it will not heal deep rifts over Hezbollah's arsenal or competing visions of Lebanon's destiny: a country mobilised for open-ended "resistance" or a Western-leaning one focused on business, tourism and pleasure.

The talks will cover electing a president, forming a national unity government and revising the electoral law -- issues at the heart of an 18-month-old political stalemate.

The two camps have already agreed that army chief Michel Suleiman should fill the presidency, vacant since November, and seem close to consensus on an electoral law for next year's parliamentary polls. Until now, deadlock has persisted over the opposition's demand for veto power in a national unity cabinet.

But pro-government Sunni, Druze and Christian leaders will probably have to give ground on this to their Shi'ite-Christian opponents after Hezbollah's display of muscle, Safa said.

"Hezbollah has been able to drive them into complete irrelevance. This government is a lame duck -- it makes decisions and cannot implement them," Safa said.

"They need a graceful exit, an agreement to save their face. Without that, they will be driven into a slow death."

Saudi-backed Sunni leader Saad al-Hariri and his allies, accused by Hezbollah of being U.S.-Israeli stooges, are likely to ask the Shi'ite group to re-commit to its now-broken promise to use its guns only against Israel, never against Lebanese.

Upper hand

Prime Minister Fouad Siniora's cabinet, which had enraged Hezbollah by outlawing its military telephone network and removing an airport security chief seen as close to the group, scrapped those decisions on Wednesday.

That met one demand of Hezbollah-led fighters who had seized Muslim parts of Beirut, routing pro-government Sunni and Druze gunmen, before returning overt control to the Lebanese army.

While Hezbollah has the upper hand, it also needs a deal to consolidate its advantage politically and to calm Sunni-Shi'ite tensions, argued Amal Saad-Ghorayeb, an expert on the group.

"They want a quick resolution. The longer it lasts, the harder it will be to translate military success into political gains," she said. "Hezbollah's image will be hurt more and more by the day", if sectarian instability persists.

Saad-Ghorayeb said Hezbollah's objective was not to take territory or topple the government, but to deter any future challenge to its weaponry and its "resistance" to Israel.

Siniora's government has been pressed by the United States and others to pursue efforts to disarm Hezbollah in line with U.N. resolutions, but its impotence to do so has been exposed.

"The message was loud and clear," Safa said. "What happened last week was primarily to create this buffer to protect the weapons. Neither Siniora's government nor any future one will dare to talk about weapons without Hezbollah's consent."

That will not stop Washington from returning to the issue, a reminder that prospects for success in Qatar depend as much on foreign powers as on the Lebanese faction leaders they support.

"That's part of the problem of Lebanon not being able to find a Lebanese solution, but being hostage -- by choice or by dysfunctional Lebanese politics -- to bigger confrontations between Iran, Syria, the U.S., Israel, Saudi Arabia," said Paul Salem, head of the Carnegie Endowment's Middle East programme.

Holding the dialogue in Qatar, on better terms with Syria and Iran than with Arab heavyweight Saudi Arabia, is in itself a subtle sign of how the power balance has shifted in Lebanon.

"Saudi Arabia has been very angered by what took place and is suspicious of an Iranian hand in it," Salem said. "For these two big players to be fiercely opposed to each other in a small country like Lebanon could have devastating consequences."

Last week's bloodshed was shocking enough for a country still rebuilding from civil war. Lebanon's role as a fulcrum of regional rivalries means the stakes in Qatar will be high.

The risks of failure?

"A round two of violence that might be fratricide, a civil war," Safa said. "Sectarian strife is still containable, but we saw a rehearsal of what might happen and it doesn't look good." -Reuters