The cable, which was revealed by WikiLeaks on Tuesday, quotes Saud al-Faisal, the Saudi foreign minister, as saying in a meeting with US ambassador to Iraq David Satterfield in May 2008, that a "security response" was needed to the "military challenge" posed to Beirut by the Iran-backed group.
The Saudi prince feared a Hezbollah victory against the Lebanese government led by then prime minister Fouad Siniora would eventually lead to Iran's takeover of the country, according to the memo.
There was a need for an "Arab force" to create and maintain order in and around Beirut, he argued, saying the Lebanese army was "too fragile to bear more pressure," according to the cable from the US embassy in Riyadh.
Such a force would be aided by UNIFIL troops deployed in southern Lebanon, while the "US and NATO would need to provide movement and logistic support, as well as naval and air cover," the cable added.
Saud argued that "of all the regional fronts on which Iran was now advancing, the battle in Lebanon to secure peace would be an easier battle to win."
He told Satterfield that Siniora strongly supported the plan but that only Jordan, Egypt and the Arab League were aware of it.
What was needed was an "Arab force" drawn from Arab "periphery" states to deploy to Beirut under the "cover of the UN," Saud said, accusing the UN troops in southern Lebanon of "sitting doing nothing."
But Satterfield said there were real questions about the "political and military" feasibility of such a scheme, and winning a new mandate for UNIFIL would difficult.
Another cable also released on Tuesday said that the Saudi military used "massively disproportionate force" in a campaign last year against Houthi fighters in Yemen.
"Day and night aerial bombardment and artillery shelling have been the main instruments of what is increasingly regarded within the Saudi military as an embarrassingly long campaign," said the memo from the US embassy in Riyadh.
The three-month operation against the lightly armed Houthi fighters on the border areas with Yemen was also seen as "poorly planned and executed" and "brought unexpectedly high Saudi casualties."
"Nonetheless, the conflict has been carefully spun as a heroic and successful struggle to protect Saudi sovereignty," the memo added.
The cable, dating from December 2009, was among the latest batch of US State Department memos released by the WikiLeaks website.
Yemen launched an offensive against a Huthi uprising in August 2009 and the rebels later clashed with Saudi forces, forcing a truce in February.
A separate cable released six days earlier said the fighting had "been the most significant Saudi military engagements since the tribal battles that Abdulaziz that fought to establish the Saudi kingdom" in 1932.
Saudi King Abdullah had grown increasingly angry at why it was taking so long to expel "the ragtag" Huthi fighters, why there were so many Saudi casualties and "why the Saudi military has not proven more capable, given the billions invested in modernization over recent decades."
The US embassy cable dated December 30, 2009, said Riyadh had turned to Washington to help provide munitions, images and intelligence.
"The US military responded with alacrity to the extent possible, primarily by flying in stocks of ammunition for small weapons and artillery," the cable said.
But it acknowledged that many of the requests had been bogged down and there were Saudi complaints that the United States had failed to rally to "support Saudi Arabia during its hour of greatest need."
More than 300,000 people were displaced in Yemen by the fighting, the UN High Commissioner for Refugees has said.
The British government feared harsh action against it by Libya if the Lockerbie bomber died in prison, other cables published by WikiLeaks claim.
In a 2009 cable, US ambassador to Libya Gene Cretz wrote that Libyan officials had threatened to diminish political ties if Abdelbaset al-Megrahi was not freed from a Scottish prison. Cretz wrote that Libyan officials also implied that Britons in Libya "would be at risk”.
Another cable described a British diplomat's relief after al-Megrahi could be returned to Libya. It quoted Tripoli ambassador Vincent Fean as saying that Libya could "have cut us off at the knees."
Al-Megrahi was the only person convicted of the 1988 attack of a US plane over Lockerbie, Scotland, which killed all 259 people aboard.