Hasan Nasrallah is exactly where he always wanted to be.

"Ever since I was 9 years old, I had plans for the day when I would start doing this," the Hezbollah chief reflected on his leadership quest, when I visited him in the southern slums of Beirut not long ago. "When I was 10 or 11, my grandmother had a scarf. It was black, but a long one. I used to wrap it around my head and say to them that I'm a cleric, you need to pray behind me."

Nasrallah is a man of God, gun and government, a cross between Ayatollah Khomeini and Che Guevera, an Islamic populist as well as a charismatic guerrilla tactician. The black head wrap -- signifying his descent from the prophet Muhammad -- is now his trademark, and he is Lebanon's best known politician. Lines from his speeches are popular ring tones on cellphones. His face is a common computer screensaver. Wall posters, key rings and even phone cards bear his image. Taxis play his speeches instead of music.

At 46, Nasrallah is also the most controversial leader in the Arab world, at the center of the most vicious new confrontation between Israel and its neighbors in a quarter-century. Yet he is not the prototypical militant. His career has straddled the complex line between Islamic extremist and secular politician. "He is the shrewdest leader in the Arab world," Israeli

Ambassador to the United States Daniel Ayalon told me on Friday, "and the most dangerous."

Until this eruption of violence along the Lebanese border -- the most dramatic cross-border acts of war by Israel since its invasion of Lebanon in 1982 -- Nasrallah had largely succeeded in being both. A fiery populist, he extolled the virtues of democracy to me in one breath, then argued that only suicide bombers can secure that democracy. "As long as there are fighters who are ready for martyrdom, this country will remain safe," he bragged in a speech earlier this year. But now the man who helped create Hezbollah may finally have to make a choice.

When we met in his office, before this new battle with Israel, Nasrallah claimed to see peaceful political activism as Hezbollah's future.

"We have ministers, we have members of parliament, we have municipal council members, leaders of unions and syndicates," he boasted as we sat on faux French brocade furniture at his now-bombed headquarters. "If we are maintaining our arms until now, this is due to the fact that the need for it is still there, due to the permanent or constant Israeli threats against Lebanon. Whether we keep on with the resistance or stop the resistance, we are effectively now a full-fledged political party."

The outskirts of Beirut are known as the dahiya, Arabic for "suburbs." It has come to mean the poor, dense and sometimes dangerous maze of slums that is also Hezbollah-land. Its dirty alleys are crammed with concrete-block shanties. Gnarled masses of wire run from one building to the next, illegally tapping into electrical, phone and television lines. While lights burn brightly in trendy downtown Beirut, the dahiya is often eerily dark because of sporadic electricity.

Hezbollah has become an enterprise in the dahiya, often outperforming the state. It runs a major hospital as well as schools, discount pharmacies, groceries and an orphanage. It runs a garbage service and a reconstruction program for homes damaged during Israel's invasion. It supports families of the young men it sent off to their deaths. Altogether, it benefits an estimated 250,000 Lebanese and is the country's second-largest employer.

In the dahiya, Nasrallah is an icon, famed for his oratory and revered as a champion of Lebanon's long-dispossessed Shiite minority.

Born in a Christian suburb of Beirut in 1960, the first of nine children, Nasrallah only joined Hezbollah after the Israeli invasion. Trained in Islam at the top seminaries of both Iraq and Iran, he became one of the original military leaders in Iran's new training camps.

"I was then 22 years old," Nasrallah told me. "We used to discuss issues among ourselves. If we are to expel the Israeli occupation from our country, how do we do this? We noticed what happened in Palestine, in the West Bank, in the Gaza Strip, in the Golan, in the Sinai. We reached a conclusion that we cannot rely on the Arab League states, nor on the United Nations," he said. "The only way that we have is to take up arms and fight the occupation forces."

With a force of between 600 and 1,000 full-time fighters, along with thousands of backups pulled from the streets willing to become human bombs, Nasrallah managed what the tens of thousands in the armies of Egypt, Syria and Jordan were unable to do for a half-century -- force Israel to retreat. Today, his is the last private army left in Lebanon.

Nasrallah became the movement's secretary general in 1992, at age 32, after Israeli helicopter gunships assassinated his predecessor. His first major decision was to shift a movement best known for its terrorism spectaculars against the United States, France and Israel into politics -- and run candidates for parliament.

"They resist with their blood," declared Hezbollah campaign posters at the time, featuring suicide bombers. "Resist with your vote."

But Hezbollah's shifts under Nasrallah should not be mistaken for moderation. As with other Islamist groups in the Middle East, change was about survival of both cause and constituents. The end of Lebanon's 15-year civil war in 1990 had altered the environment. From then on, Hezbollah needed to participate in the political system -- or face loss of the weapons that gave it power.

Today, Hezbollah holds 14 seats in parliament, one of the larger blocs, and in 2005 joined the government for the first time. This year, Nasrallah even made an unlikely alliance with a right-wing Christian who was once a Lebanese army general -- while still accepting what U.S. intelligence has pegged at about $100 million annually from Iran in goods, cash and arms, including an estimated 13,000 rockets and missiles.

For six years, Hezbollah also demonstrated some military restraint. When Israel ended its 18-year occupation of Lebanon in 2000, Nasrallah declared, "We have liberated the south. Next we'll liberate Jerusalem." Yet until last week, Hezbollah's increasingly infrequent offensives were largely limited to the disputed border town at Shebaa Farms.

But the transition is far from complete; Nasrallah still wants it both ways. A few weeks before I saw him, he gave a speech about the publication in a Danish newspaper of cartoons mocking the prophet Muhammad, which triggered rioting worldwide and more than 100 deaths. Nasrallah condemned "those fools that did wrong to our prophet," but he also criticized the attack on the Danish Embassy in Beirut. "Let us stop this nonsense," he said. "As Muslims and Christians, we should continue to cooperate and unite in order to reject the offense to our prophets and our holy belongings."

Yet Hezbollah still has refused to comply with U.N. Resolution 1559, which calls for the dismantling and disarming of Hezbollah's militia. "The Israeli Air Force could destroy the Lebanese army within hours, or within days, but it cannot do this with us," Nasrallah told me. "We exercise guerrilla warfare. . . . Lebanon still needs the formula of popular resistance."

Whenever Nasrallah talks about the terrorist tactics with which Hezbollah has become synonymous, the message is still tortuously two-faced. Our exchange about al-Qaeda and the Sept. 11, 2001, attacks was typical:

"What do the people who worked in those two [World Trade Center] towers, along with thousands of employees, women and men, have to do with war that is taking place in the Middle East? Or the war that Mr. George Bush may wage on people in the Islamic world?" he asked me. "Therefore we condemned this act -- and any similar act we condemn."

But the Pentagon?

"I said nothing about the Pentagon, meaning we remain silent. We neither favored nor opposed that act," he replied. "Well, of course, the method of Osama bin Laden, and the fashion of bin Laden, we do not endorse them. And many of the operations that they have carried out, we condemned them very clearly."

The use of terrorism is a difficult subject for the head of a group that succeeded in redefining extremist tactics. Hezbollah deployed the first Islamic suicide bombers in modern times. It was also the first to carry out multiple attacks simultaneously. Al-Qaeda and Hamas and Iraq's insurgents -- all Sunni movements -- have copied these tactics.

Nevertheless, Nasrallah has only disdain for bin Laden and the Taliban. In April, an al-Qaeda cell in Lebanon tried to assassinate him. And the late al-Qaeda chief in Iraq this spring condemned the Shiite movement as an "enemy of the Sunnis" -- ironically, in hindsight -- for protecting Israel by preventing Palestinian attacks from Lebanon. "The worst, the most dangerous thing that this Islamic revival has encountered . . . was the Taliban," Nasrallah told me. "The Taliban state presented a very hideous example of an Islamic state."

Yet Hezbollah has not abandoned its extremist origins, even as it tries to establish conventional political legitimacy.

"It is unacceptable, it is forbidden, to harm the innocent," he told me, reflecting on Iraq. "To have Iraqis confronting the occupation army, this is natural. But if there are American tourists, or intellectuals, doctors, or professors who have nothing to do with this war, they are innocent, even though they are Americans, and it is forbidden. It is not acceptable to harm them."

In 2004, Hezbollah issued a communique condemning the beheading of American contractor Nicholas Berg by al-Qaeda in Iraq as a "despicable act" that did "grave damage to Islam and the Muslims." But the day before we talked, a suicide bomber had detonated a bomb at a Tel Aviv restaurant during the busy lunch hour, killing 11 and wounding more than 60 civilians. The bomb was laced with nails and other projectiles; the injuries were particularly gruesome. Islamic Jihad, another Iranian-backed group, claimed credit.

I asked Nasrallah how he applied his metric on civilians to Israelis. He described the issue of what he calls "occupied Palestine" as "complicated."

"It is our opinion that in Palestine, women and children need to be avoided in any case," he responded. "But it came after more than two months of daily Israeli killing of Palestinians, and the destruction of houses and schools, and the siege that is imposed on the Palestinians. There is no other means for the Palestinians to defend themselves. That is why I cannot condemn this type of operation in occupied Palestine."


Robin Wright, Washington Post diplomatic correspondent, interviewed Nasrallah for her upcoming book, "Dreams and Shadows: The Future of the Middle East" (Penguin Press).