TEL AVIV

NO one knows exactly how or when the war in Lebanon will end. U.N. resolutions could interrupt hostilities – or the guns still may be blazing a month from now.

The big-picture outcome’s already apparent, though: No clear winner, a practical stalemate – and both sides declaring victory.

A day spent listening to Israeli generals, active and retired, was just plain discouraging. Most were in denial, convinced that they’re winning.

They’re right – if you only count war’s physical effects. The Israeli Defense Forces have wounded Hezbollah deeply. But not one of those generals grasped the importance of the media war – which Hezbollah has mastered.

Even with 30,000 more reservists called up and IDF forces pushing toward the Litani River, the Israelis aren’t turning tactical wins into strategic effects. In the combat zone, they’ve “taken the sea, but not the islands.” Controlling much of the countryside, they’ve hesitated over rooting Hezbollah fighters out of their town and village strongholds. Fear casualties, lose wars.

In the air, the IDF has flown over 10,000 sorties, dropping more than 13,000 bombs and launching over 2,000 air-to-ground missiles. Yet the terrorists keep firing “junk” rockets – they’re shadow targets airpower can’t hunt.

Embodying a brave military’s strategic blindness, a retired major general remarked dismissively that “a missile strike on Tel Aviv wouldn’t matter, because it wouldn’t do any serious damage.”

That’s nuts. If one Hezbollah missile reached Tel Aviv and knocked over a trash can, it would be perceived as an electrifying triumph by the Muslim masses in the Middle East.

The problem isn’t that the Israeli generals are “fighting the last war.” The problem is that they haven’t been fighting seriously – as if Israel’s future depends on it. The stakes are huge, and they’ve been fighting small. Now they’ll have to hit very hard to make up for lost time.

A lone general put the situation bluntly: “Hezbollah prepared for exactly the war we’re fighting.”

Now let’s look at who’s winning from the Hezbollah’s perspective – something senior IDF intelligence officers seem unable to do. Here’s the terrorists’ take on what they’ve achieved:

* They’ve won a huge propaganda victory among the Muslim masses by standing up to Israel – and surviving (Sunni Arab leaders are terrified, but Mo’ down on the block is thrilled by Hezbollah’s toughness).

* They’ve endured a monthlong Israeli offensive – and they still hold most of their fortress towns near the border.

* Despite the IDF’s technological advantages, the terrorists are still raining their crude rockets down on Israeli territory.

* They’ve forced the evacuation of northern Israel’s civilian population and driven still more Israelis into bomb shelters – for Arabs, it’s grimly satisfying to turn Israelis into refugees.

* The Israeli army’s tactical caution during the first four weeks of war convinced Hezbollah that the IDF fears its fighters.

* Hezbollah even managed to hit an IDF vessel at sea – another symbolic score.

For the bad guys, all that adds up to a win.

The practical outcome of this conflict remains obscure. There are plenty of moving parts. And, ultimately, the Lebanese will make the decisions that determine the long-range results.

Weakened militarily, Hezbollah could nonetheless be perceived as the moral victor in the region – attracting support and encouraging Syria and Iran to cause more trouble. Or, if its charismatic leader, Hassan Nasrallah, were killed, the movement could deteriorate. Israel’s security could be strengthened – or the decades-long bloody muddle could drag on.

But let’s stand way back: Picture a minority people in the Middle East. They’re outnumbered and outgunned, but willing to fight to the death for their dream. Once, that was Israel.

Now, in the Muslim narrative, it describes Hezbollah.

Facts hardly matter in the Middle East (for Arabs, especially, facts are too terrible to contemplate). Beliefs trump all else. And tens of millions of Arabs and Persians already believe that Hezbollah’s the victor.

Israel has got to learn to see the world through the eyes of its enemies.

Ralph Peters’ latest book is “Never Quit the Fight.”