Inside what was once one of Beirut's oldest and best-known cinemas, dozens of Lebanese, Palestinians and Syrians displaced by the Israel-Hezbollah war spend their time following the news on their phones, cooking, chatting and walking around to pass the time.

Outside on Hamra Street, once a thriving economic hub, sidewalks are filled with displaced people, and hotels and apartments are crammed with those seeking shelter. Cafes and restaurants are overflowing.

On top of the grievous toll in human life and misery, Israel's war against Hamas and Hezbollah has been expensive, and the painfully high financial costs are raising concerns about the long-term effect of the fighting on the country's economy.

Military spending has ballooned, and growth has stalled, especially in dangerous border areas that were evacuated. Economists say the country could face declining investment and higher taxes as the war strains government budgets and forces tough choices between social programs and the military.

With Iran-backed Hezbollah on the defensive after a series of heavy Israeli blows, the United States and Iran are locked in a showdown over Lebanon's future, analysts said.

Hezbollah, the most powerful regional force backed by Iran, which arms and finances it, has long held sway in Lebanon.

Just a month ago, Dahieh's bustling streets were packed with traffic, families strolling about and youths in cafes, but now silence dominates the abandoned Hezbollah bastion, interrupted only by the sound of Israeli bombs.

Escalating Israeli attacks since late September, after nearly a year of low-intensity cross-border exchanges, have reduced much of the Lebanese capital's once densely-packed southern suburbs to rubble and sent many of its residents fleeing.

Hassan Alik, fleeing escalating violence in the Israel-Hezbollah war, left Lebanon on Saturday aboard a ship to avoid Beirut's airport, which he feared "could be bombed" at any moment.

After months of disappointment, U.S. President Joe Biden's administration sees new hope for reaching a Gaza ceasefire after Israel killed Hamas leader Yahya Sinwar, but the upcoming U.S. elections cast a shadow on prospects for a breakthrough.

Israel's killing of Yahya Sinwar, Hamas' top leader and the mastermind of the group's Oct. 7 attack, is a dramatic turning point in the brutal yearlong war that it touched off.

Sinwar's killing on Thursday decapitates the Palestinian militant group that has already been reeling from months of assassinations up and down its ranks. And it is a potent symbolic achievement for Israel in its battle to destroy Hamas.

Yahya Sinwar masterminded an attack on Israel that shocked the world, unleashing a still-widening catastrophe with no end in sight.

In Gaza, no figure loomed larger in determining the war's trajectory than the 61-year-old Hamas leader. Obsessive, disciplined and dictatorial, he was a rarely seen veteran militant who learned Hebrew over years spent in Israeli prisons and who carefully studied his enemy.

Shaban al-Dalu was sleeping in his tent in a central Gaza hospital's courtyard, still recuperating from wounds from an Israeli strike on a mosque a week earlier, when a new strike hit, setting off an inferno.

The 19-year-old university student and his 38-year-old mother, Alaa al-Dalu, were among five people killed as the blaze ripped through a tent camp sheltering hundreds of Palestinian families in the courtyard of the Al-Aqsa Martyrs Hospital in the central city of Deir al-Balah. Dozens of others, including children, were severely burned.

By Jasmin Lilian Diab, Lebanese American University

The escalation of hostilities between Israel and Hezbollah since September 2024, and Israel's bombing of civilian areas across Lebanon, have unleashed a profound humanitarian disaster.