Lebanon is in the midst of an ill-fated reconstruction effort. The $30 billion plan involves not only physical reconstruction after 15 years of a devastating civil war but also an attempt at national reconciliation between Lebanon's historically contentious confessional groups. I argue that the effort is doomed to a path of diminishing returns due to the lack of a regional peace agreement between Israel and Syria. Syria's domination of the Lebanese political scene and Israel's occupation of nearly 10% of Lebanese territory, both of which are near certainties in the absence of peace, ensure Lebanon will remain the last remaining battlefield of the Arab Israeli conflict. The lack of stability in the region, real or perceived, negatively impacts investor confidence, virtually crippling a reconstruction plan that relies heavily on foreign investment. Further, the lack of a regional peace exacerbates internal problems within Lebanese society, which in and of themselves are quite capable of derailing reconstruction. Lebanon's reconstruction will have to wait for the precarious peace process to run its course.