The government had some success restoring control over parts of southern Lebanon. In the late 1980s, Syrian-backed Palestinian groups controlled most of the Palestinian refugee camps in Lebanon. The Fatah movement led by Yasser Arafat fought to regain control and in September 1990, Fatah took possession of the largest camp, Ain al-Hilweh, after fierce fighting.
But Fatah refused to disarm in accordance with the Taif Agreement, so the Lebanese Army attacked Palestinian positions in Southern Lebanon in July 1991 and expelled them from around Sidon. Then Fatah surrendered all its heavy weapons. Only in two refugee camps, Ain al-Hilweh and Mieh Mieh, did it continue to hold on to its light weapons.
However, there were severe limits to this success story. The Syrian army remained in Lebanon and Hezbollah pledged to “keep its weapons while Israel still poses a threat.” The presence of the Israeli army showed that their threat was very real. In 1992, Israeli helicopters killed Abbas al-Musawi, secretary-general of Hezbollah, in a targeted assassination. He was succeeded by Hassan Nasrallah, who would be assassinated by Israel in 2024. Low-level skirmishing between Israel and Hezbollah continued almost constantly across the Israel-Lebanon border until 1996.
On April 11, 1996, the Israeli army launched Operation Grapes of Wrath, a seventeen-day campaign to punish Hezbollah and force the Lebanese and Syrian governments to prevent its attacks on Israel. Israeli planes bombed Hezbollah positions in southern Lebanon, southern Beirut and the Bekaa. There was a huge exchange of rockets and artillery from both sides, which caused heavy civilian casualties, though, as so often, the exact numbers are hard to pin down. According to UNIFIL more than 120 civilians were killed by Israeli fire and an estimated 500 injured. The Israeli government put the fatalities at 102.
The highpoint was the Qana massacre (18 April) in South Lebanon, when the Israeli military fired artillery shells at a UN compound, where Lebanese civilians were sheltering. More than 100 people were killed and some UNIFIL troops were seriously injured.
At the end of April, Hezbollah and the Israeli government put a temporary end to the fighting with a ceasefire understanding (not a formal agreement) that prohibited Hezbollah from carrying out any attacks on northern Israel in exchange for an agreement that Israel and its South Lebanese Army clients would not attack civilian targets in Lebanon.
A monitoring group, with American, French, Lebanese and Israeli members, was appointed to oversee the ceasefire. This did not bring complete peace, but the number of clashes was substantially reduced. Lebanese civilian casualties went down from 640 in 1996 to 123 in the first eight months of the following year.
By this time, the gloss was coming off the Hariri government. The national debt had skyrocketed, and the economy was in deep trouble. In 1998, Salim Hoss replaced Hariri as prime minister as part of a power struggle between Hariri and Émile Lahoud, who had been elected as the new president with Syrian support.