We can destroy Israel - Hezbollah

Mr Nasrallah said that the Israeli withdrawal from southern Lebanon showed that if Arab states had the will, they could destroy Israel. "The Arab armies and Arab peoples are able not only to liberate Gaza, the West Bank and East Jerusalem. In all simplicity, with decision and will they can restore Palestine from the [Jordan] River to the [Mediterranean] sea," he said.

"There is no army in the world that can force us to drop our weapons from our hands, from our grip."

Speaking in Beirut's southern suburbs, which were heavily damaged by Israeli bombing during the war, Mr Nasrallah also openly challenged Mr Siniora, head of a cabinet that includes two Hezbollah ministers but is mostly comprised of politicians who oppose Hezbollah's alliance with Syria and Iran.

"The current government is unable to protect Lebanon or reconstruct Lebanon or unify Lebanon," he said, calling for a new "national unity government".

Mr Nasrallah said Hezbollah would consider giving up its weapons only when a "strong and capable and just government" was in place. There was a need for a new election law "so that everyone will feel that they have genuine representation", he added.

The remark was seen calling for an end to the traditional division of power in Lebanon that has favoured Maronite Christians and Sunni Muslims at the expense of his Shiite Muslim constituency.

However Faris Soueid, a Christian politician close to the prime minister, said after the speech that it "will not scare the government".

The strident tone contrasted with almost apologetic remarks by Mr Nasrallah made during an interview with al-Jazeera after the war ended. At that time he said he would not have ordered the abduction of two Israeli soldiers on 12 July had he foreseen the magnitude of Israel's response.

Ehud Olmert, the Israeli prime minister, insisted this week that Israel had won the war. Mr Nasrallah during his speech quoted from a poll in Thursday's Yediot Ahronoth newspaper pointing to Mr Olmert's plummeting popularity.

Mr Nasrallah said Israel had failed to inflict any lasting harm on Hezbollah despite its devastating bombing campaign, which took the lives of about 1,200 Lebanese, mostly civilians.

"The resistance today has more than 20,000 rockets. It has recovered all its organisational and military capabilities and it is stronger than it was," before the war, Mr Nasrallah said. Hezbollah fired about 4,000 rockets into Israel during the war, in which 157 Israelis were killed.