Hezbollah is grappling with mounting financial difficulties driven by regional instability, internal Lebanese policy shifts, and the economic burden of ongoing military engagements, according to an Israeli security source cited by Sky News Arabia on Sunday.

“The collapse of the Syrian regime, recent decisions by the Lebanese government, and the party’s rising war expenses are all worsening Hezbollah’s economic situation,” the Israeli source said, adding that Israel has identified efforts by Hezbollah to establish new channels for transferring Iranian funds.

“We are continuing to monitor and thwart these attempts,” the source said.

One of the primary tools Hezbollah is using, according to the source, is the Al-Qard Al-Hassan Association, a financial institution that has come under scrutiny for allegedly serving as a shadow bank for the group. The source said the association is being used to pay compensation to Hezbollah operatives, making it harder for the organization to meet its obligations to lenders.

“Hezbollah is facing a major crisis of confidence with its support base,” the source added. “Most of its current efforts are focused on compensating its own people."

The source also accused Hezbollah of obstructing financial reform bills in the Lebanese Parliament; legislation seen as essential for the country’s engagement with international donors and institutions working on reconstruction and recovery.

“Hezbollah is impeding these reforms, which are vital for the government's dealings with the global community,” the source said, adding that the group has “largely lost the competition for the Shiite public to the Amal Movement.”

The remarks come just days after the U.S. Treasury Department announced new sanctions targeting individuals and entities linked to Hezbollah’s financing operations. In a parallel move, the U.S. State Department’s Rewards for Justice program on Monday offered up to $10 million for information on Hezbollah’s financial networks in South America — a key region for the group’s alleged illicit fundraising activities.

According to political sources familiar with the matter who spoke to Lebanon’s Central News Agency, the international community, particularly Washington and Tel Aviv, is now closely monitoring Hezbollah not just militarily, but financially.

“If rebuilding Hezbollah’s military arsenal remains a red line, the same can be said for its financial reconstruction,” one source said.

While the U.S. and Israel appear to have recently disagreed over the use of continued military pressure against Hezbollah and Iranian proxy groups, with Israel pushing for sustained strikes and the U.S. reportedly leaning toward de-escalation, both remain aligned on intensifying financial pressure.

As part of this strategy, U.S. envoy Morgan Ortagus is expected to return to Beirut in the coming days, political sources said, to reinforce Washington’s push for “maximum financial pressure” on Hezbollah. This includes urging Lebanese authorities to address the status of the Al-Qard Al-Hassan Association, which the U.S. sees as enabling the group’s access to funds.

The sources said Washington is pressing for official Lebanese action against the organization not only as a way to curb Hezbollah’s influence but also to help contain Israel’s military posture.

“This step would count in Lebanon’s favor,” a political source noted, pointing to the country’s refusal to allow Iranian aircraft to land at Beirut airport as another sign of compliance with the ceasefire agreement.

“If Lebanon is indeed adhering to the ceasefire, then what justification remains for Israel to maintain its occupation of Lebanese territory or to continue violating the truce?” one source asked.