An all-out war between Israel and Hezbollah could lead to catastrophic consequences for both nations.

• The threat of war between Israel and Hezbollah is so severe that U.S. President Joe Biden dispatched one of his top advisors, Amos Hochstein, to Israel and Lebanon to seek a resolution.
• Hamas is estimated to have 1/10 the military capability of Hezbollah, which is among the most heavily armed non-state groups globally.
• Over 150,000 people from southern Lebanon and northern Israel have been displaced due to the ongoing cross-border fires.
• Both Israeli and Hezbollah leaders state that they do not desire a full-blown war, but the possibility of a miscalculation remains high.

In recent weeks, the frequency of fire exchanges between Lebanon and northern Israel has increased rapidly, resulting in heightened tensions between Israel and Hezbollah and prompting the U.S. to demand an immediate diplomatic resolution.

A devastating war between Israel and Hezbollah, an Iranian-backed Lebanese Shia militant and political organization labeled as a terrorist group by the U.S. and U.K., would occur if all-out war breaks out between them.

The threat of war between Israel and Hezbollah, a significantly stronger and better-equipped military force than Hamas, has prompted U.S. President Joe Biden to dispatch one of his top advisors, Amos Hochstein, to Israel and Lebanon to seek a resolution.

Lloyd Austin, the U.S. Defense Secretary, stated on Tuesday that diplomacy is the most effective approach to preventing further escalation. He emphasized that the U.S. is actively seeking a diplomatic agreement that will restore stability to Israel's northern border and allow civilians to safely return to their homes on both sides of the Israel-Lebanon border.

Since October 7th, when Israel began its war against Hamas in Gaza, Hezbollah has launched thousands of rockets into Israel. These rockets, originating from Lebanon, have resulted in the deaths of 18 Israeli soldiers and 10 civilians, according to Israel. Meanwhile, Israeli shelling has led to the deaths of approximately 300 Hezbollah fighters in Lebanon and around 80 civilians, as calculated by Reuters.

Over 150,000 people from southern Lebanon and northern Israel have been displaced due to the ongoing cross-border fires.

A war between Israel and Hizbullah would be catastrophic for the region, affecting not only Israel and Lebanon, according to Victor Tricaud, a senior analyst at consulting firm Control Risks, who spoke to CNBC.

'It only takes a single stray rocket'

The most severe war situation? Tricaud outlines a massive ground invasion and aerial bombing campaign against Lebanon by Israel, intense bombing by Hezbollah with consistent hits on Israeli civilian targets, and the possibility of Iran's direct involvement, which would have significant consequences for the global economy.

The conflict would cause significant damage to national infrastructure, including water, electricity, and communications, as well as homes and military targets on both sides.

Tricaud stated that the confrontation may not occur for a while, with several intermediate steps likely to occur before it reaches such a high level of intensity.

Both sides' leaders have stated that they do not desire an all-out war. Despite their recent tit-for-tat strikes, which have resulted in lethal consequences, they have taken care to avoid major escalation.

Lebanon is currently facing an economic and political crisis, with its infrastructure ill-equipped to handle a new war. If Israel were to launch a major incursion into the country, it would be disastrous, especially in the south, where Hezbollah has a stronghold and poses a significant threat to its popularity and support among the population.

"Each side believes they can inflict more pain on the other within the assumed rules of a limited fight, as stated by Nimrod Novik, a fellow at the Israel Policy Forum, which aims to achieve a two-state solution to the Israeli-Palestinian conflict," said Nimrod Novik.

"If a stray rocket causes significant casualties and the adversary responds with the same kind of attack, things can quickly escalate."

Hezbollah: 10 times stronger than Hamas

Hezbollah is widely regarded as one of the world's most heavily armed non-state groups, with an estimated military capability 10 times greater than Hamas. Despite most previous conflicts between Israel and Hezbollah ending without a decisive outcome, Hezbollah remains a formidable opponent.

In 2006, a 34-day war between two adversaries resulted in Israeli ground troops fighting in Lebanon. Hezbollah claimed victory, while Israel saw it as a strategic failure. As a result, Hezbollah is now significantly stronger and better equipped with advanced weapons.

Hezbollah combatants have become more battle-hardened due to their participation in the war in Syria and will be able to use asymmetric warfare tactics effectively due to their long-standing territorial control in southern Lebanon.

He stated that the toll of a full-scale war on the Israeli population would be significantly higher than it was in 2006.

In the event of a full war, Hezbollah's weapons arsenal poses a significant threat, as illustrated by retired Israel Defense Forces Col. Miri Eisin, who currently directs the International Institute for Counterterrorism in Israel.

She stated that Hezbollah may employ mortars, rockets, guided missiles, drone swarms, suicide drones, and ground troops to undermine Israel's defenses, which we have not witnessed in this region before.

According to Eisin, Israel will target a large number of Hezbollah locations, and Hezbollah possesses surface-to-air missiles that they have not used extensively, which they obtained from both Iran and Russia.

Even with Israel's robust air defense systems, there will still be infiltrations that will cause casualties in the center of Israel, as she stated.

If American support is vital for Israel in this situation, it increases the risks if other Iranian-backed groups participate and target American resources.

The Biden administration is reportedly set to aid Israel in defending against Hezbollah retaliation, with possible measures including restocking its Iron Dome air defense system, providing intelligence, and potentially striking Hezbollah itself in the event of heavy attacks against Israel. The U.S. Department of Defense has been contacted for comment.

Novik from the Israel Policy Forum maintains that the diplomatic path to de-escalation and a resolution has not been fully explored.

"The more the risk of escalation, the more the parties are likely to make room for diplomacy," he said, "It's a typical 'too close for comfort' situation."