By Alistair Lyon, Special Correspondent

AITA AL-SHAAB, Lebanon, July 10 (Reuters) - He passed all his school exams, helped out in his father's sandwich bar, ran a bicycle shop and still found time to train with local Hezbollah guerrillas in this village on Lebanon's border with Israel.

Shadi Saad's parents mourn their 19-year-old son, killed in last year's 34-day war against Israel, but say they are proud of what he did and are ready to let his younger brother join the "Islamic resistance" once he has completed high school.

"I just want him to finish his exams first," said Hani Saad, fingering blue worry beads at his home in Aita al-Shaab, a village battered in some of the heaviest fighting of the war.

"I'm going to be a fighter too if the Israelis return. They have turned moderate people into people who hate them. I want revenge for my son. I want to drink the blood of the Israelis, not just kill them," added the 42-year-old with greying hair.

The words came out calmly and provoked no alarm from his wife Zeinab, whose kindly face and blue eyes were framed in a black headscarf.

"Haidar is now doing his middle school exams. He wants to join the resistance when he finishes school. He has chosen to follow his brother's path," the mother of five explained.

Shadi was among about 270 Hezbollah "martyrs" killed during the conflict that erupted after the Shi'ite guerrillas captured two Israeli soldiers in a cross-border raid near Aita al-Shaab -- and spirited them away through the village on July 12.

He was not even a full-time fighter. Hezbollah relied heavily on part-timers like Shadi, who defended their towns and villages tenaciously when Israeli troops pushed into Lebanon.

"SINCERE PROMISE"

About 1,200 people were killed in Lebanon, along with 158 Israelis, most of them soldiers, although 43 civilians were also killed by Hezbollah rocket strikes on northern Israel.

Shadi's young face stares from a Hezbollah poster stuck on the window of his father's sandwich joint.

"We are your sincere promise" reads the slogan commemorating his death -- a reference to a pledge by Hezbollah leader Sayyed Hassan Nasrallah to force Israel to free Lebanese held in Israeli jails. The two sides have yet to agree a prisoner swap.

Shadi's parents sent him to a school run by Christian nuns in the nearby village of Rmeish -- a photo of him in graduation robes and cap has pride of place on their living-room wall.

The Shi'ite family's loyalty to Hezbollah seems more rooted in national self-defence than in any religious identification with the guerrilla group's Iranian-inspired ideology.

"What's Hezbollah? It's just a name. The resistance is there only because we don't have an army to defend us," Saad said.

"When there is a real Lebanese army, I'll be the first to stop my son from joining the resistance."

After last year's ceasefire, about 15,000 Lebanese troops moved to the south, alongside an expanded U.N. peacekeeping force, while Hezbollah agreed to keep its arms out of sight.

Apart from daily Israeli reconnaissance flights over Lebanon, the frontier has been relatively quiet since then.

But few southerners trust UNIFIL or the poorly equipped army to defend them effectively if hostilities erupt again.

"The situation can't last," Saad said, predicting another war. "Israel can't accept the defeat it suffered and Hezbollah can't accept that the Israelis keep violating (air space)."

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