Many people don't know that water is an important issue in all of the tension in the Middle East between Israel and the surrounding Arab nations. Lebanon has begun pumping water out of a river.

WAZZANI, Lebanon, Oct 16 (Reuters) - Lebanon began pumping water on Wednesday from a southern river that also supplies Israel -- a project that has drawn Israeli ire and U.S. mediation to avoid a regional flare-up.

Israeli Foreign Minister Shimon Peres told parliament in Jerusalem that Lebanon's new project to pipe water from the Wazzani river to parched villages could lead to an escalation of hostilities between the countries, which have no relations.

Lebanon's guerrilla group Hizbollah, which helped end Israel's 22 year occupation of south Lebanon in May 2000, has warned it would retaliate "within seconds" for any Israeli attack on the water station.

But Israeli officials have toned down recent references to the water dispute, apparently giving way to international mediation efforts to limit the amount of water that would be channelled to Lebanese villages.

Amid tight security, Lebanese President Emile Lahoud officially opened the project on the Wazzani, a tributary of the Hasbani river that feeds the Jordan river and the Sea of Galilee -- Israel's biggest freshwater reservoir.