It's a bad way to deal with Lebanon's Shiites.

The Israeli Defense Forces' "Iron Fist" policy marks the beginning of a potentially dangerous new stage in Israel's unhappy involvement in Lebanon.

The outcome may be a long-term confrontation with Lebanon's Shiite Moslems, who as the largest religious community will play an increasingly important role within Lebanese politics and consequently in shaping the country's attitudes toward the Jewish state.

Lebanon's relations with Israel traditionally have been very peaceful, in sharp contrast with those of Israel's other three Arab neighbors. The IDF has launched heavy reprisal raids as well as "hot pursuit" operations and preemptive strikes inside Lebanese territory since 1965. But these were always a response to the violent guerrilla activities of Palestinian refugees residing in Lebanon.

The "Iron Fist" policy -- involving armored raids on Shiite villages, mass detentions, curfews, demolition of homes and even killings -- is the IDF's first major retaliatory response to the Shiite resistance campaign mounted in southern Lebanon against the IDF's occupation troops.

The Shiite guerrilla attacks, however, should be viewed as part of a Shiite "revolution" evolving within Lebanon since the 1970s. It was launched by a cleric, Imam Musa Sadr, who formed the first Shiite populist movement, Amal, and attracted a growing following. Sadr's goal was securing political, social and economic reforms from the Lebanese oligarchy, which, though dominated by Maronite Catholics, has always included Sunni and even Shiite feudal leaders.

Comprising as much as half the population, Shiites form the underclass of Lebanese society. They live in the slums of Beirut's southern suburbs, and in the neglected villages of the countryside. Amid the violence of their country, a key aim of the populist Shiite revolt became "liberating" traditional Shiite regions such as southern Lebanon. For many years Shiite gunmen fought the hegemony of the Palestine Liberation Organization there, and there was much joy when the IDF drove out the PLO. The Shiites since have been subjected to further radicalizing pressures by the Israeli intervention.

The main consequence has been the emergence of a powerful splinter faction with links to Iran, the military Hezbollah, or Party of God, which has taken part in the resistance campaign against the IDF. Principles of Shiite Islam, such as martyrdom and fighting tyranny no matter how overwhelming the odds, are guiding the Lebanese Shiite movement as never before.

Advocating an Islamic republic for Lebanon and the destruction of Israel, Shiite fundamentalists have proved their determination by carrying out as many as 12 suicide attacks in Lebanon since 1982. All but four targeted the IDF.

The Islamic Jihad has claimed responsibility for most of these, as well as for the abduction of Westerners residing in Lebanon. But American and Israeli officials suspect Hezbollah is behind the extremism.

Israel should tighten its almost-anything-goes guidelines for staging reprisals if it hopes to contain rather than inflame the forces of Shiite fundamentalists. Otherwise, the "Iron Fist" will produce further militancy within the Shiite movement. This may overtake the efforts of Nabih Berri, a secular figure who has been standing in for the disappeared Musa Sadr as the leader of Amal, which as of now remains the mainstream Shiite movement. Berri's program stresses Lebanese reunification, and his men attack the IDF in the name of nothing more than Lebanese sovereignty.

The United States, though itself a tragic victim of Shiite radicalism in Lebanon, should discourage Israel from carrying its "Iron Fist" policy to an extreme. If the IDF has an impulse to employ increasingly violent countermeasures, it may find itself reinforced by Secretary of State George Shultz's suggestion that terrorism must be met with "overt power" even if there is a danger of "potential loss of life for some of our fighting men and some innocent people."