A rare inside look at Hezbollah during a recent terror trial in Cyprus portrayed a militant group with the prowess of an intelligence service: meticulous overseas reconnaissance, Western operatives with elaborate covers, training at secret bases where recruits and instructors wear masks for maximum security.

And the conviction last month of a confessed Hezbollah operative for doing terrorist surveillance of Israeli tourists has heated up a debate that continues to divide the West: Whether the European Union, like the United States and Israel, should designate Hezbollah as a terrorist group.

In a report to be published by a West Point think tank next week, a former U.S. counterterror official argues that the Cyprus case and an attack on Israelis in Bulgaria last year show that Hezbollah has returned to aggressive operations on European soil. Western counterterror agencies largely share that analysis, which has spurred a proposal by Britain for the European Union to designate Hezbollah's military wing as a terrorist organization.

"In Cyprus you have a case that underwent full judicial scrutiny, and a conviction in a European court," said Matt Levitt, the report's author, a former top Treasury Department intelligence official who is now a senior fellow at the Washington Institute for Near East Policy. "You have all this evidence. You have a European Hezbollah operative who was also doing courier work across Europe. What else do they need?"

Decisions in the 27-nation European Union move slowly through a bureaucratic labyrinth, especially on diplomatically sensitive questions. But the current debate departs from traditional European reluctance to confront a militant group that is a powerhouse in the government and on the streets of Lebanon.

In Paris, Berlin and other capitals, the terrorist activity and Hezbollah's military support for the Assad regime in Syria's civil war have challenged a strategy of maintaining cordial relations with Hezbollah to prevent retaliation and preserve diplomatic leverage.

"It has been and will be the most serious discussion on Hezbollah they've had," said a U.S. counterterror official who requested anonymity because he is not authorized to speak publicly. "Stability in Lebanon has been one of the main European arguments for not designating Hezbollah. But when they see what Hezbollah is doing Syria, which is exacerbating instability there and creating spillover into Lebanon, causing instability there as well, it changes this perspective."

On July 18 last year, the bombing of an airport bus carrying Israeli tourists at the Bulgarian beach resort of Burgas killed six people. Investigators said they identified two alleged Hezbollah operatives as suspects, although little evidence has been made public.

The court verdict in Cyprus carries more weight in the legalistic European Union. There are also parallels between the Burgas bombing and the surveillance and potential targets described by Hossam Yaakoub, the Lebanese-Swedish operative whom police in Cyprus arrested days before the attack in Bulgaria. His statements are extraordinary because of the wealth of detailed revelations about the inner workings of Hezbollah.

"The case provides unique insights into how (Hezbollah) recruits and trains new operatives," Levitt writes in a case study of the Cyprus trial that will appear Monday in the CTC Sentinel, a publication of the Combating Terrorism Center at the U.S. Military Academy in West Point.

The military think tank provided ProPublica with an advance copy of the article, "Hizb Allah Resurrected: the Party of God Returns to Tradecraft." ProPublica separately obtained the 26 pages of depositions that Yaakoub, 24, gave Cypriot police.

During the past decade, arrests, raids and infiltration by spy agencies have produced a great deal of information about the operations, training camps and leadership of al Qaeda in Afghanistan and Pakistan.

In contrast, Hezbollah remains a secretive, disciplined militant group with worldwide reach and a vast war chest. Iran, a close ally, provides arms, funds, training and strategic direction. Hezbollah's paramilitary operations, social welfare work and political power have won a formidable reputation in the Arab world and beyond. It is a militant group that increasingly resembles a state entity.

"I believe in the armed struggle of Hezbollah until the liberation of Lebanon," Yaakoub told his interrogators, according to the Cypriot police depositions. "Hezbollah is the political party, which supports the people of Lebanon and fights for the rights of our country … Although I believe in the armed struggle for the liberation of Lebanon from Israel, I am not in favor of the terrorist attacks against innocent people. For me, war and terrorism are two different things."

A three-judge panel in Cyprus nonetheless found that Yaakoub was preparing the terrain to attack Israeli tourists and other Jews on the island as part of Hezbollah's holy war. The Cypriot police presumably received a tip about him from Israeli intelligence, Levitt said, and followed him as he documented and photographed flights arriving from Israel, buses transporting Israeli tourists, kosher restaurants and other potential targets.

Step-by-Step Training

After his arrest last July 7, Yaakoub reacted with the practiced cool of a well-trained operative, according to the depositions. He denied everything. He explained that he was traveling with a Swedish passport because his family had moved to Sweden six months after he was born and he had lived there until he was 14. He described himself as a Beirut-based trader in souvenirs, clothes and other merchandise. He backed up his story with company documents and names of local clients.

As police confronted him with detailed evidence, however, his resistance began to crumble. During an interrogation that began after midnight a week after his arrest, he admitted the truth: "I am an active member of the Hezbollah for about four years now. I was recruited by a Lebanese called Reda in 2007… He told me that he needed me for the secret mission of Hezbollah … my secret mission would be surveillance and undercover activities."

Yaakoub fits a classic profile, according to Levitt and other experts. Hezbollah takes advantage of the global Lebanese diaspora to recruit operatives with Western passports. Bulgarian authorities, for instance, are seeking two Lebanese suspects who traveled with authentic Australian and Canadian passports — and fake U.S. driver licenses — in the airport bus bombing last year.

Canadians, Swedes and Colombians of Lebanese descent have allegedly taken part in past plots. And Yaakoub told police he trained in Lebanon alongside a fighter who spoke English with an American accent, according to the deposition.

The training began with five to seven months of lessons in tradecraft in Beirut from an instructor named Yousef. He taught the recruit about cover stories and clandestine operations, sending him at one point to deliver an envelope to a man in Istanbul. Next came military training with pistols, rifles, rocket-propelled grenades and C-4 explosives at secret camps in south Lebanon. The sessions were designed for maximum operational security.

"They took me from different spots in Beirut, using closed vans so I could not see," Yaakoub said, according to the deposition. "Each training group consisted of 10-13 people. Both the trainees and instructors wore hoods, so they could not recognize each other. We had individual tents and exercises were performed in a separate place. It was forbidden to see each other."

Soon Hezbollah chiefs sent Yaakoub on courier missions to the French city of Lyon and to Amsterdam, where he thought he recognized the voice of his contact as one of his masked classmates from Beirut. The deployment of Yaakoub in Europe coincides with a dangerous strategic shift by Hezbollah, experts say.

In the 1980s and 1990s, Hezbollah and Iran conducted bombings, kidnappings and hijackings on Israeli, American and European targets from Argentina to Lebanon to France, inflicting hundreds of casualties. In the early 2000s, the group curtailed operations outside the Middle East theater, focusing on its struggle with Israel.

In 2010, however, leaders of Hezbollah and Iran launched an aggressive new terror campaign. They wanted to retaliate against Israel for the assassinations of Hezbollah warlord Imad Mughniyeh in 2008 and of Iranian nuclear scientists in subsequent years, according to Western counterterror officials.

"Even before the Burgas attack, we were growing concerned about what Hezbollah is doing around the world," the U.S. counterterror official said. "They are plotting in a way we hadn't seen since the 1990s. There is certainly a feeling that Iran and Hezbollah have ramped up their networks."

Reactivating Terror Wing

Iran and Hezbollah decided on a new offensive in which the Quds Force, the external operations wing of Iran's intelligence service, would hit hard targets such as Israeli and Saudi diplomats, according to Levitt's article. Hezbollah, meanwhile, would focus on Israeli tourists and other soft targets, Levitt asserts, citing information from U.S., Israeli and European security agencies.

As a result, Hezbollah revamped the Islamic Jihad Organization, its international terrorist wing, according to Levitt.

"New operatives were recruited from the elite of (Hezbollah's) military wing for intelligence and operational training, while existing IJO operatives were moved into new positions," the article says. "At the same time, the IJO invested in the development of capabilities and tradecraft that had withered since the 2001 decision to rein in operations."

The past two years have brought a spate of attacks and plots. The Iranian security forces are accused in cases including the assassination of a Saudi diplomat in Pakistan, a bomb attack on an Israeli diplomat in India and a foiled plot to kill the Saudi ambassador in Washington, D.C.

Alleged Hezbollah plots have been discovered as well. In January of last year, Thai police found a warehouse full of bomb-making chemicals for an alleged plot against Israeli targets. The chief suspect in that case resembles Yaakoub: an accused Hezbollah operative with dual Lebanese and Swedish citizenship.

Meanwhile, Yaakoub did patient undercover work in Cyprus, according to his confession and evidence at his trial. Hezbollah provided expense money and a salary of $600 a month. He burnished his cover story by registering his import-export firm, looking into acquiring a warehouse, meeting with clients and, on his handler's advice, developing a social life on the island.

Acting on instructions from Beirut, he watched Israeli tourists arrive on flights and charted their movements on airport buses and at hotels, using codes to disguise his notes and communicate with fellow operatives, according to his confession.

The surveillance takes on ominous significance in light of the Burgas attack, in which a young man with a backpack bomb blew up a bus as it picked up Israeli tourists at the airport. The attacker died in the blast. European investigators believe he was not a suicide bomber, but rather a dupe or the victim of a premature explosion.

Yaakoub's reconnaissance featured very specific tasks for reasons that are not yet clear. He identified Internet cafes for his handlers. He obtained three SIM cards for mobile phones. He meticulously studied an area behind a hospital, taking photos and drawing a map.

"I am not aware of the organization's objectives on the matter, nor do I know why they sent me to this mission," he told interrogators, according to the deposition. Despite his confessions, he refused to accept that he was involved in terrorism, declaring:

"It was just collecting information about the Jews, and that is what my organization is doing everywhere in the world."

Reaction in Europe

The conviction of Yaakoub adds to mounting evidence of Hezbollah activity across Europe. And it creates a headache for the European Union. Most governments in Europe have a markedly different view of Hezbollah than Israel or the United States, which see it as a terrorist organization pure and simple. Only the Netherlands agrees with that assessment. Britain has designated Hezbollah's military wing as a terror organization, but not the political leadership.

The motives of other European governments vary. Especially on the left, sectors of European political parties and public opinion tend to see Hezbollah more favorably than Americans do. They accept the view that it is a resistance movement, not a terrorist organization.

Nations such as Spain and Italy are also reluctant to confront the group because they have military peacekeeping contingents in Lebanon that are vulnerable to retaliation. In addition, key European powers such as France and Germany described their relationships with Hezbollah on pragmatic grounds.

French officials assert that if they designated Hezbollah as a terrorist group, it would cut them off diplomatically from a powerful force in Lebanon and the Middle East. Tensions between Hezbollah and Europe could further destabilize the conflict-ridden political environment in Lebanon, the argument goes.

The common wisdom has begun to change because of increasing exasperation with Hezbollah's actions in Europe, signs of involvement in crime and corruption, and its military role in Syria, experts say. Earlier this year, British diplomats began to push their proposal that the EU label Hezbollah's military wing a terrorist group.

This would curtail funding and political support for the group in Europe, but maintain a channel for dialogue, British officials say. U.S. officials and experts think there is no distinction between Hezbollah's political and military leadership, but they think the proposal would be powerful and timely.

"It would send a strong message," Levitt said.

The discussions about the proposal have intensified in the European Union in recent weeks, according to U.S. and European officials. Political and economic crises in Bulgaria and Cyprus have complicated matters, however, because those countries were taking a lead role along with Britain.

"We have been pretty active on this issue," a senior British diplomat said. "We are keen to do it. But it is a slow process."