After nearly three decades of constant change and reform, Iran's hostility toward Israel is the most entrenched element of its foreign policy. The problem is that Tehran's hostility has served both its ideological mandates and strategic calculations. There has never been sufficient incentive for the clerical oligarchs to abandon a policy whose costs in terms of US sanctions and criticism seemed bearable. Given the current consolidation of conservative power within Iran and the collapse of diplomatic efforts to ensure a viable Israeli-Palestinian peace, Iran's policy is unlikely to change noticeably. Hizbullah's apparent triumph only strengthens the hands of Iranian hardliners pressing for confrontation with the Jewish state. In the end, the best manner of extracting Iran from the Arab-Israeli arena is for the United States and the key Arab states to launch a concerted diplomatic effort to resolve the remaining differences between Israel and the Palestinian Authority. In the meantime, a determined effort to rebuild Lebanon and strengthen the central government in Beirut may in time diminish Hizbullah's influence. Such a development would not just diminish Iran's radicalism, but would remove a series of corrosive disputes that have done much to undermine the stability of the Middle East.