In reality, Israel's basic strategy since 1948 has been to rely on two things in the pursuit of its objectives: a strong military, and strong outside Western support. So far this strategy has worked in one sense: Israel still survives. The question is how much longer this strategy will in fact continue to work.
Israel's current military campaign is a direct parallel of Bush's invasion of Iraq. The Israeli generals are already noting that Hezbollah's military is far more formidable than anticipated, that U.S. allies in the region are already taking wide distance from the United States and Israel (note the Iraqi government's support of Lebanon and now that of the Saudi government), and soon will discover that the Israeli public's support is more fragile than expected. Already the Israeli government is reluctant to send land troops into Lebanon, largely because of what it thinks will be the reaction of its own people inside Israel. Israel is heading towards a humiliating truce arrangement.
What the Israeli governments do not realize is that neither Hamas nor Hezbollah need Israel. It is Israel that needs them, and needs them desperately. If Israel wants not to become a Crusader state that is in the end extinguished, it is only Hamas and Hezbollah that can guarantee the survival of Israel. It is only when Israel is able to come to terms with them, as the deeply-rooted spokespersons of Palestinian and Arab nationalism, that Israel can live in peace.
Israel's only real guarantee will be that of the Palestinians. And to get this guarantee, Israel will need to rethink fundamentally its strategy for survival.