As of this morning, the fighting between Israel and Hizbollah ended. My thoughts:
1) The war was executed poorly, which is probably directly related to the fact neither Olmert or Peretz have any real military experience. Putting Peretz in charge of defense was probably the worst thing Olmert did when he took power. Coupled with Halutz's insistence to try air power (not surprising given his previous position as head of the air force) and the ground war was executed way too late. Israel had to know they'd only have a limited amount of time to execute their objectives and they waited way too long to go about them.
2) Only in the Arab world could a victory be the lack of total defeat. Going back to 73 when the Egyptians proclaimed victory because they weren't beaten in six days, it continued through the ntifada and until today Hizbollah when claimed a big victory. Come on, they spent the last month complaining how Israel was bombing them back to the stone age, and now they are claiming victory? How is the almost complete dessimation of the infrastructure of the southern part of your country consistent with victory?
Obviously Israel did win this war either. There is no way, given the current realities, that Israel could "defeat" Lebanon, but the objective was to destroy or seriously weaken Hizbollah. That didn't happen and hundreds of lives were lost and billions of shekels of damage was caused by the daily bombardment of Haifa and the north. Israel obviously came out on the better end in any objective metric, but the IDF needed to do more to ensure Hizbollah is no longer a great threat and that didn't happen.
3) I don't like Resolution 1701, but I basically agree with Barry Rubin that in theory it's not bad but won't be enforced because no one will dismantle or disarm Hizbollah. The whole hinges on which countries will constitute the new (and we hope improved) UNIFIL and whether those countries will do anything to stop the inevitable Hizbollah violations. If they can keep Hizbollah out of the south, that will minimize conflict and probably keep a very fragile ceasefire in place for a while. It's amazing that we can't get a resolution calling for someone relevant to disarm Hizbollah, but in practice who would carry that out? This whole situation sucks.