Odaisseh had last been bombed four days ago. Israeli missiles would strike it again in the evening. But on this searing July morning, the small Lebanese village on the frontier with Israel was deathly quiet as three armoured cars with UN markings crept along its narrow main road.

“From here to the end of Odaisseh, we are not going to see people in the streets,” said Lt Col José Irisarri, a Spanish officer serving in a battalion of UN peacekeepers in southern Lebanon. “Only ambulances and paramedics.”

For months, Israel and the militant group Hezbollah have been exchanging fire over the “blue line” that demarcates Israeli-held territory from Lebanon. Fears are growing it could boil over into full-blown war. In Odaisseh, and other areas to which the Guardian gained access last week with a UN peacekeeping patrol, it appears that war has already arrived.

Long stretches of Odaisseh and a neighbouring village, Kafr Kila, have been reduced to jagged seas of concrete rubble, strewn with rebar, electrical cables and upturned furniture. A yellow Hezbollah flag was tangled in the wreckage of one Kafr Kila home. Shocks of bright-pink bougainvillea protruded from the ruins of others.

The few buildings along Odaisseh’s main road to be spared a direct hit still carry scars of the village’s repeated poundings by heavy bombs, their windows shattered and metal garage doors left writhing and twisted.

The extent of the damage in these villages since October has been rarely glimpsed, at least by the media. Surveillance cameras mounted across the Israeli frontier watch anything that moves. Still, someone has returned in the past week to mount red and black flags in some of the debris, in defiant commemoration of the Shi’a Muslim religious festival Ashura.

The convoy encountered no traffic but for a Lebanese army vehicle and three ambulances from emergency services organisations linked to Hezbollah and another Shi’ite party, Amal.At least 16 health workers have been killed in Lebanon since October.

There was no sign of life in the centre of Odaisseh but a lone, stray dog and a young man beneath the awning of a shop, staring as the UN convoy passed. Kafr Kila appeared to have just three people in the streets: two young men and an older one, sitting in the dark underneath a wooden shelter at the roadside, drawing from a water pipe.

“We used to call this happy Lebanon,” Irisarri says, surveying the damage through his car’s reinforced window. For years after Israel and Hezbollah last went to war in the summer of 2006, despite intermittent, renewed outbreaks of fighting, peacekeepers regarded these scenic hills less than an hour from the beaches of the eastern Mediterranean as a plum posting.

That has changed since 8 October, the day after Hamas’ surprise assault on southern Israel, when Hezbollah launched a barrage of artillery and rockets at Israeli-controlled territory “in solidarity” with its allies in Gaza.

What has followed over the past nine months has been an escalating game of tit-for-tat, with Hezbollah and local Palestinian allies mounting increasingly heavy bombardments of Israeli military positions and civilian settlements, and Israel responding with vastly greater firepower and a surgical campaign of assassinations of Hezbollah commanders. At least 543 people have died in Lebanon, most of them Hezbollah fighters but many not, including three children killed earlier this week. At least 30 Israelis have died, mostly soldiers.

“Those green fields are Israel,” Irisarri gestures out the window at farmland in the valley below. It is startlingly close. In quieter times, the call to prayer in Odaisseh could be heard in Misgav Am, the Israeli kibbutz within sight over the fence. But the call no longer sounds and there would be nobody to hear it: both areas have been emptied of civilians, part of an exodus from the wider region of about 60,000 Israelis and more than 90,000 Lebanese.

Israeli attacks have outnumbered those of Hezbollah and its allies by about five to one, according to data from the tracking group Acled.It is a chequered battlefield, the damage overwhelmingly concentrated in Shi’a areas while some nearby Christian-majority ones are nearly intact.“From Marjayoun to Kafr Kila, about 5km, you can see completely different villages,” Irisarri says. “In some we can see people shopping and having normal lives.”

Analysts and diplomats assess both sides would prefer to end the fighting so that civilians can return home, but are entangled in a cycle of mutual escalation. “What’s going on now is an attrition war,” says Khalil Helou, a retired Lebanese general. “One that we are losing, as Lebanon. And Hezbollah is losing. And Israel is losing.”

The Israeli prime minister, Benjamin Netanyahu, has been under pressure to find a way for his citizens, many holed up in hotels at the government’s expense, to return to the north before the next school year in September. Military planners in Tel Aviv understand an open war with Hezbollah, thought to have more than 130,000 rockets and missiles in its stockpile, could do unprecedented damage to Israeli cities.

Hezbollah, too, is thought to be feeling the strain. The faces of hundreds of its slain commanders and fighters line walls and roadsides across Shi’a-majority parts of the country; in response to precisely targeted Israeli drone and airstrikes, the group’s leader Hassan Nasrallah recently warned members to stop carrying phones. But the assassinations continue. “When you don’t have a phone and go to a gathering, that is more suspicious,” Helou says.

A ceasefire in Gaza could provide a way out. Hezbollah says it would unilaterally stop launching weapons into Israel if its forces left Gaza. What appears more politically palatable for Netanyahu is a transition to an undefined lower-intensity war. Depending what form that takes, negotiators hope it may be enough for the Islamist group to back off.

“Say there is no big operation, military operation on the ground against Gaza or trying to invade some places again,” says Abbas Ibrahim, a former Lebanese security chief who negotiated between Hezbollah and the west during his tenure. “It means it’s a ceasefire.”

Israel’s other call is for Hezbollah’s fighters and weapons to be relocated at least 5km away from the border – far from villages like Odeissah and Kfar Kila.

That is a more difficult demand, analysts say, and misunderstands how deeply woven the group is in frontline villages such as these, which have been defined for decades by resistance to Israeli wars and occupations.

“A fighter [in these areas]has his normal life as farmer or a worker in a factory or sometimes a business owner, but at the same time has this dual role as a Hezbollah fighter,” says Mohanad Hage Ali, a fellow at the Carnegie Middle East Centre.

Instead, Israel may be seeking to make the villages unliveable, Helou says. “These guys are at home,” he says. “Their homes are their combat positions. You can’t tell them to leave. So, the Israelis are destroying the homes, destroying the combat positions.”

Additional reporting by William Christou