The basic problem is this. Hizbollah, a Islamic radical group dedicated to the destruction of Israel, and supported by Iranian money and weapons, has become the chief military and economic support of the Shia minority in Lebanon. That's over a million Shia, living throughout southern and central Lebanon, including parts of the capital, Beirut. Hizbollah draws on the Shia community for gunmen, and rocket launching teams. Negotiation with Hizbollah is pointless, as these terrorists know that any ceasefire is just a pause in their campaign to destroy Israel. Peace is not on Hizbollah's agenda. Iran's leaders publicly endorse Hizbollah's plans for Israel, and dismiss world condemnation of this call to genocide.
Increasing Israeli combat patrols in south Lebanon are trying to hunt down and destroy the rockets that have been hidden in the area over the last six years, and kill the teams of Hizbollah men who take the rockets out and launch them. Israeli aircraft are still hitting trucks moving down with additional supplies of rockets. Israel estimates that it has destroyed several thousand rockets, and nearly 3,000 have been fired into Israel. Thus about half of Hizbollah's rocket supply is gone. Israeli commanders still believe the ground patrols can catch and kill all the rocket launch teams. But as long as several hundred thousand Lebanese civilians remain in southern Lebanon, this is going to be difficult. The other option is to drive the entire Lebanese population out of southern Lebanon. But it would still take a week, or more, to hunt down the rocket launching crews that would stay behind. So, unless the Lebanese government suddenly develops a backbone, at least another month of combat can be expected.
Israel is expanding the economic and government targets it is hitting throughout Lebanon. Quiet negotiations continue with the non-Shia factions in Lebanon, trying to get everyone to send the Lebanese army into the border zone and take control. The non-Shia factions fear that will mean civil war. Israel points out that, as long as Hizbollah has its own army, the civil war, that officially ended in 1990, is still on, and the Lebanese government is losing, having surrendered large parts of the country to this Iranian backed faction. Israel has put the Lebanese government in a dilemma. Either the government disarms Hizbollah, or Israeli air power will continue taking the country's infrastructure apart. The Israelis hold the Lebanese government responsible for this mess, as the Lebanese kept putting off dealing with Hizbollah until it was too late. Well, almost too late. There is one more chance for the Lebanese to take on Hizbollah, perhaps in the context of a UN organized ceasefire. Hizbollah can't be ignored any more, for as long as these Shia terrorists exist, Lebanon burns.
Hizbollah does want some kind of ceasefire, because they are running out of resources (rocket and launch teams) faster than Israel is running out of anything (troops, money, jet fuel, smart bombs, etc). In the end, Hizbollah is a low budget operation up against the wealthiest and most powerful economy in the region. Trying to destroy Israel is a Fools Errand. But as long as the fools have rockets and suicidal volunteers, they will keep trying.
August 6, 2006: A Hizbollah rocket landed among a group of Israeli soldiers getting ready to move into Lebanon, killing a dozen of them. The soldiers were in a parking lot outside one the several border towns that have been getting hit with terrorist rockets for decades. The civilians have learned how to adapt, but the nearly 20,000 soldiers on the border are there to go into harms way. A longer range rocket landed in the city of Haifa, killing three civilians.
August 5, 2006: The fighting in Gaza has killed about 170 Palestinians in the last five weeks, as Israel pressures Hamas to give up an Israeli soldier they captured on June 25th. Hamas insists on a prisoner swap, Israel refuses. The Palestinian economy has been badly hurt, since last March, when most foreign aid was cut off in response to Hamas insisting that Israel must be destroyed. Lack of media attention, because of events in Lebanon, is hurting Hamas more than the constant Israeli raids, and an empty treasury.
August 4, 2006: While press reports have covered the evacuation of large numbers of Americans and other Westerners in Lebanon, there has been little or no attention paid to the plight of perhaps 140-160 thousand foreign workers in the country. Workers from Philippines, Bangladesh, Sri Lanka, and Ethiopia are particularly numerous, ranging from 20,000-50,000, and have little or no prospect of leaving the country.
Arab media continue to revel in their victory over Israel. Hizbollah has not been smashed, Lebanese civilians continue to get killed, as do Israelis. In Arab eyes, this is winning. Which explains why the Arab world has fallen behind the rest of the planet in almost every measure (economically, politically, education, science). Attempts to stop the fighting are doomed to failure because too many Arabs see Israel's destruction as the primary goal. While disarming Hizbollah would be in the best interests of Israelis, and the majority of Lebanese (those who are not Shia), that is not possible now because Hizbollah has been declared Islamic heroes for killing Israelis. Diplomacy is difficult when dealing with a culture of death, suicide and people on a mission from God.