Hezbollah is facing one of the most precarious moments in its history, a senior Israeli source has said, citing deep fractures in its command structure, severe financial distress, and shrinking influence since the assassination of its long-time leader Hassan Nasrallah in 2024.

According to the source, who spoke to Kayhan-London on condition of anonymity, the militant group has been left “effectively on its knees” following a series of targeted Israeli strikes that have decimated key leadership figures and disrupted its operational capacity.

“Intelligence and field investigations indicate that Hezbollah’s command network has been critically compromised. Their logistics, funding, and movement have all been hit hard,” the source said.

The group, once flush with cash from Tehran, is reportedly struggling to cover basic expenses, including the salaries of its fighters and staff. The collapse of financial support is partly attributed to Iran’s dwindling influence in the region and its inability to maintain reliable money and arms transfer routes, particularly through Syria which once was a vital conduit before the ousting of President Bashar al-Assad.

The Israeli source said that “trafficking and money transfer channels for Hezbollah, especially through Beirut’s airport, have been effectively shut down.” Lebanese authorities and the national army have reportedly stepped up security measures, intensifying anti-terrorism operations and choking off critical supply routes.

In a significant blow to Hezbollah’s financial machinery, Israeli airstrikes have repeatedly targeted Al-Qard Al-Hassan, an Islamic interest-free financial institution widely regarded as the group’s shadow bank. Several of its branches have been hit, and top executives are believed to have been eliminated in the raids.

Informal intelligence reports also suggest that Iran attempted several times to smuggle cash to Hezbollah via diplomatic pouches aboard commercial flights—attempts reportedly thwarted by tighter monitoring of Beirut’s international airport by the Lebanese army.

Although Al-Qard Al-Hassan was officially established to support Lebanon’s poor and underserved communities, the source said it had become “a hub for financing terrorism,” where money from illicit drug and weapons trafficking, as well as Iranian aid, was diverted to fund Hezbollah’s military operations.

“Hezbollah diverted funds originally intended for hospitals and social projects into terror campaigns,” the source said. “Even donations from Iranian and regional Shia supporters never made it to the people they were supposed to help.”

In November 2024, Iranian Revolutionary Guards official Hassan Pelarak, known for overseeing Tehran’s support to regional militias, announced that Iran had raised the equivalent of nearly $500,000 in cash and 150 kilograms of gold for its so-called “Resistance front,” which includes Hezbollah. However, Israeli intelligence believes little—if any—of that aid reached needy Lebanese citizens.

Earlier this year, the hacking group Codebreakers claimed to have breached Bank Sepah in Iran and discovered that Pelarak was among its wealthiest account holders, raising further suspicions about the misuse of donor funds.

Hezbollah’s dire financial straits have become so acute that the group has even sought assistance from the United Nations, despite long-standing animosity and ideological divergence. The Israeli source said this move underscores the scale of the crisis and comes amid ongoing corruption within the group's upper ranks.

“They’ve siphoned off millions under the guise of organizing a funeral and constructing a mausoleum for Nasrallah,” the source claimed.

The military setbacks have reportedly left Hezbollah’s fighters deeply demoralized and increasingly unwilling to move in public.

“They’re terrified,” the source said. “They stay hidden. We haven’t seen a show of force, a parade, or even a motorcade in months.”