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Intelligence Online (IO), a subscription-only insider newsletter based in Paris, cited the roll-ups of Hezbollah operatives in Azerbaijan and Egypt and an embarrassing diplomatic flap in Colombia as setbacks to the Iran- and Syria-backed organization.

The trial of two Lebanese Hezbollah agents arrested on espionage charges in Azerbaijan is scheduled to open in Baku next Wednesday, June 24.

IO claims that the arrests of Ali Karaki and Ali Najmeddin were the result of the "active cooperation between the CIA outpost in Azerbaijan, Turkey's Milli Istihbarat Teskilati and Israel's Mossad."

A Cairo court, meanwhile, is expected to see the appearance this week of another suspected Lebanese Hezbollah operative, the newsletter reports. Sami Chehab was arrested in April on charges of assembling a terrorist cell of 48 persons in Egypt.

"As in Azerbaijan, several foreign intelligence agencies took part in rolling up the network, particularly the CIA and Mossad," according to IO editor Philippe Vasset.

The cases follow on a diplomatic flap in Columbia last October, when "Hezbollah's leadership was also obliged to send an official letter to the Colombian diplomatic mission in Beirut to deny any link with ... three Lebanese nationals who had just been arrested in Bogotá and accused of running an international cocaine ring," IO reported.

"The investigation of the three, who reportedly turned over 12 per cent of their gains to Hezbollah, was carried out by the U.S. Drug Enforcement agency in league with its Colombian counterpart."

According to former Homeland Security chief Michael Chertoff, Hezbollah poses a more lethal and longer term threat to America than al Qaeda.

"Al-Qaeda and its network are our most serious immediate threat, they may not be our most serious long-term threat," Chertoff writes in a book to be published in September, according to a draft obtained by Agence France-Pressse.

"Having operated for more than a quarter-century, (Hezbollah) has developed capabilities that Al-Qaeda can only dream of, including large quantities of missiles and highly sophisticated explosives," Chertoff writes in "Homeland Security, Assessing the First Five Years."

The State Department's 2008 report on State Sponsors of Terrorism said that Iran gave Hezbollah $200 million in funding and trained over 3,000 of its fighters at camps in Iran.