Six months after the guns fell silent in Lebanon, northern Israel is still busily preparing new bomb shelters and repairing damaged facilities in anticipation of the next war with Hizbullah.

In Kyriat Shmona, Israel's closest town to the border with Lebanon that was battered by more than 800 Hizbullah rockets during fighting between July 12 and August 14, local authorities are scrambling to construct enough subterranean room for everyone.

"We only have enough shelters for 60 percent of the 24,000 people living in the town and they need to be furnished with air conditioners, televisions and Internet connections so people can live normally for a long time," said mayor Haim Barbibay.

He admitted that building additional shelters, bankrolled mostly by private funds, will not be complete before the end of the year.

"The next conflict will affect the whole country and the population will inevitably be displaced, as happened last summer," Barbibay said. Nearly half a million Israelis living in the north fled further south during the war.

Already entrenched in the northern Israeli mindset, expectations of an approaching war intensified after National Infrastructure Minister Benjamin Ben-Eliezer's warning that Israel should prepare for fresh conflict this year.

The area is still recovering from the damage incurred by more than 4,000 Hizbullah rocket attacks during the war which killed more than 1,200 people in Lebanon and at least 160 Israelis, most of them soldiers.

The vast majority of Israelis consider the war a failure for the military's inability to stop the rocket attacks and recover two soldiers whose capture by Hizbullah fighters on July 12 triggered the conflict.

Haifa, the metropolitan capital of northern Israel, is also preparing for a nationwide war, says Shmuel Gants, director general of the municipality, who likewise admits that the number of shelters in the city is not enough.

The work has become more urgent in the context of warnings from the head of Israeli military intelligence, Amos Yadlin, who said last month that Hizbullah is replenishing its arsenal while U.N.