It may be that this is just a pause in the Israel-Hezbollah conflict. From the reactions on both sides (see the Israeli and Lebanese press), Israelis are seeing this as a war they lost, and Hezbollah is boasting of victory.
Israel did not get its two soldiers back, but has succeeded in controlling some border areas. It would truly have succeeded only if it had made Hezbollah's position in Lebanon weaker.
But right now that does seem to be the outcome. Israel's military now has lost some of its aura of invincibility both within Israel, and more dangerously among surrounding hostile forces.
Of course it did not unleash its full power - there were no carpet bombings of Lebanese cities in which hundreds of thousands could have been killed. But all out war is much less acceptable these days. (The US could bomb Teheran, but would find worldwide hostility if it did). War is fought within moral constraints created by the media and with an eye on outside observers.
Israel could survive an all out war, but in the skirmishing that goes on nowadays, it has revealed a major weakness. That itself is a disaster.
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