In the wake of last week’s assassination of arch-terrorist Imad Mughniyeh, there are fears in the region that a massive attack by Hezbollah against Israeli interests could spark a new Middle East war.

Although Israel denies involvement in the car bombing that killed Mughniyeh in Damascus, the Lebanese Shiite militia is threatening vengeance against Israeli and Jewish targets worldwide. Leaders in Israel and Lebanon fear that a new cycle of retaliation and reprisal could escalate into yet another showdown in Lebanon, and perhaps even beyond.

“Let it be open war, anywhere,” declared Hezbollah’s secretary-general, Sheik Hassan Nasrallah in the first of a string of chilling threats by Hezbollah and Iranian leaders aimed at Israeli interests worldwide. Past Hezbollah-Iranian behavior, which includes bombings of Israeli and Jewish targets in Argentina after another assassination, suggests that this rhetoric should be taken seriously.

Israel has introduced stringent precautions at home and abroad and is helping Jewish communities in the diaspora beef up their security.

Although the situation is explosive, there are a number of restraining factors that could stop Hezbollah and Israel at the brink: Most important, the memory of the Second Lebanon War in 2006, from which both emerged bruised and battered.

Still, the threats by Hezbollah and Iran have been unprecedented in their venom. After Nasrallah declared that Israel soon would cease to exist, Ibrahim al Amin, editor of the Hezbollah-backed al Akhbar newspaper, warned that the means used to destroy the Jewish state would be different from anything used in the past.

In a condolence message to Nasrallah, Mohammed Ali Jafari, commander of the Iranian Revolutionary Guards, also predicted Israel’s early demise.

“In the near future, we will witness the destruction of the aggressor Israel, this cancerous cell, at the able hands of the soldiers of the community of Hezbollah,” he wrote.

After the last assassination of a ranking Hezbollah figure, Secretary-General Abbas Mussawi in 1992, the organization carried out a string of retaliatory actions against Israel over a two-year period. In the immediate aftermath, it launched a five-day Katyusha attack on northern Israel, assassinated an Israeli diplomat in Turkey and bombed the Israeli embassy in Buenos Aires.

Two years later, with Iranian help, Hezbollah blew up the AMIA Jewish community center, also in the Argentine capital. In those attacks, all masterminded by Mughniyeh, more than 100 people died.

Mussawi was gunned down in broad daylight by Israeli helicopter gunships. But in Mughniyeh’s case, it is not clear whether Israel was involved in the assassination.

Mike McConnell, U.S. director of national intelligence, suggested that it might have been “internal Hezbollah” or Syria. The Kuwaiti newspaper al Rai claimed the killing was perpetrated by people from “an Arab country that shares a border with Syria,” presumably Lebanon.

The London Sunday Times fingered the Mossad. It suggested that Mughniyeh was helping Syria plan major retaliation for Israel’s mysterious airstrike against a Syrian nuclear facility in September, and that in killing Mughniyeh, Israel was taking pre-emptive action.

But most Israeli experts say the question of who killed Mughniyeh is largely irrelevant as far as the impending cycle of violence is concerned.

“It doesn’t matter who killed him. Israel is seen as the beneficiary and Israel will pay the price,” said Eyal Zisser, head of Tel Aviv University’s Dayan Center for Middle Eastern and African Studies.

As it braces for reprisal, Israel, for the first time since the 2006 war, has put Patriot antimissile systems near Haifa on alert to intercept incoming Katyusha rockets. The IDF also has bolstered its forces in northern Israel for quick response to any Katyusha barrage.

There are two other possible Hezbollah tactics the Israelis are taking seriously: the dispatch of an unpiloted aircraft laden with heavy explosives aimed at a heavily populated civilian area or at a sensitive military target, and the assassination of senior Israeli government officials.

Could all this lead to war?

Hezbollah says yes. It claims to have mobilized 50,000 militiamen and says that both Iranian and Syrian officials foresee serious confrontation with Israel in the near future.

But for all their rhetorical bluster, Hezbollah and their Iranian backers have good reasons to avoid war with Israel.

For one, Nasrallah knows that any major terrorist attack against Israel could cost him his life. It’s much easier to get to him in Beirut than it was to get Mughniyeh in Damascus, even though Nasrallah has been in hiding for many months to avoid being targeted by Israel. Nasrallah might also be constrained by a large segment of Lebanese public opinion, which blames him for the huge material losses to Lebanon caused by the war with Israel in 2006.

Therefore, says Zisser, “Nasrallah will need to come up with an act of vengeance that gives him a P.R. victory in the Arab world, but does not give Israel any excuse to launch another war.”

The Syrians, meanwhile, have made it clear that even if Hezbollah provokes a new war with Israel, they do not want to be dragged into it.

As for Iran, it will not want to get embroiled in anything that endangers its nuclear program. Israeli analysts argue that Iran’s primary strategic goal is to develop a nuclear weapon, and anything that might compromise that — a further confrontation with international public opinion or direct involvement in an escalating military process — will be avoided. The bottom line is the Iranians will be ready to back any terrorist actions that weaken Israel, as long as they are not directly involved.

Ironically, although the 2006 war and the Mughniyeh assassination have sparked a desire for revenge, they also have strengthened Israel’s deterrent posture.

The fact that Israel went to war over the kidnapping of two soldiers means Nasrallah has to gauge his next moves very carefully.