DUBAI, United Arab Emirates:

"All politics is local," the famed American congressman Tip O'Neill once said. When speaking of Middle Eastern politics, the noted Palestinian-Lebanese journalist and scholar, Rami Khouri, adds a nuance. "In the Middle East," he says, "all politics is also personal." It revolves around deals between individuals, and among families.

Certainly, nowhere would this appear to be truer than in his native land. Lebanon is a small country in which families hold sway from one generation to the next, building and breaking alliances and rivalries all the while.

"There's a reason the Lebanese have prospered in the diaspora," Paul Salem told me wryly one day: they are always on the lookout for the next deal. We were standing at the thirteenth-story window of a Dubai convention centre, surveying what is, in effect, a vast construction site sprawling across the dusty, baking heat of the desert. There, we reflected on the state of the Middle East. Like Khouri, Dr Salem, the director of the Carnegie Endowment in Beirut, felt a cautious optimism for his homeland.

Shell casings rained down

Lebanon can behave in curious ways. A friend of mine who lived through the country's civil war once told me of the day he sheltered under his car when a gunfight broke out in the street: the car radio was blaring Olivia Newton-John's Have You Ever Been Mellow, while shell casings rained down on him, and all he could think to do was ask the gunman perched on his car to spare him the hot casings by aiming in a different direction.

That capacity for surrealism may explain how the country could go from a renewed bout of open fighting to a peace deal in the space of a few weeks. After it looked as if the country was about to re-erupt in civil war, its key leaders got together and reached an agreement in Qatar that, remarkably, seems to have left everyone happy. In return for a veto over cabinet appointments, the Shi'ite Hezbollah will accept a political arrangement which leaves the country's Christian minority with a renewed hold on power.

Geopolitics

Lebanon's ethnic and religious complexity has been managed by a power-sharing scheme which allows its factions the right to representation in various offices. By and large, this has preserved stability. The system broke down in the country's civil war, when communal lines were sharply drawn and the deal-making functioned badly.

The desire not to return to war apparently drove the peace-making. But so, too, did regional geopolitics, as it always does in a country so sensitive to winds from abroad. Hezbollah, according to Salem, is anticipating another Israeli war, and does not want to be diverted by local fighting. Peace talks between Syria and Israel could further pressure Lebanon to tackle the state-within-a-state which Hezbollah has become.

For his part, Khouri expects that the window of peace of a few years will cause a renewed economic boom in the country. That, he hopes, might lead to a Northern Ireland scenario, in which rising prosperity lures hardliners towards the virtues of permanent peace.

Dr Salem is perhaps a little more guarded. Ever mindful of the ways in which Lebanese politics is affected by currents abroad, he reckons that much will depend on what happens in Israel, Syria, Iran and the US - not to mention what might happen among these countries.

Nevertheless, Lebanese adaptability, which made it possible for Beirut to maintain its cultural richness, even through a war, seems to have triumphed once again.

One hopes that it lasts: as a model of inter-communal stability, Lebanon is one of those experiments one would like to succeed.