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SCOTT JAGOW: The war between Israel and Hezbollah has cost Lebanon dearly. Tomorrow, people from 60 countries gather in Sweden to raise money for rebuilding Lebanon. They’re hoping to come up with half a billion dollars. Today, the European Commission vowed to give a tenth of that. And the Lebanese government pledged money to many families that lost a home. Our European Correspondent Stephen Beard reports.

STEPHEN BEARD: The size of the compensation offer is significant: $40,000. Roughly three times the sum Hezbollah has already been handing out to distressed families. This looks like an attempt by the Lebanese government to outbid the militia group in the battle for popular support. Neil Partrick of the Economist Intelligence Unit:

NEIL PARTRICK: There’s clearly some discomfort on the part of the Lebanese government that Hezbollah has reengaged its social and welfare role by beginning some small attempts at reconstruction already.

The situation is complicated by the fact that the government is a coalition which includes Hezbollah. But the government as a whole fears the growing power of the militia group and the influence of its principal backer: Iran.

Will money talk? Will the government’s more generous compensation package wean hearts and minds away from Hezbollah? Not in the short term, says analyst George Joffee:

GEORG JOFFEE: Hezbollah is on a roll. That’s to say that for most Lebanese its ability to resist the Israeli army is the most important thing.

But, he says, as the multibillion-dollar reconstruction gets underway, money will prove more persuasive. And Saudi Arabia and other moderate Arab states will back the Lebanese government with hard cash:

JOFFEE: Saudi Arabia, Egypt and Jordan are furious with Hezbollah for the fact of the war and the way in which they have been discomforted and embarrassed by it.

The Saudis alone, he says, would be happy to foot the reconstruction bill in the hope of keeping Hezbollah and Iran at bay.

In London, this is Stephen Beard for Marketplace.