War against Hezbollah was a political disaster

In view of the limited resources committed to the campaign, Israel Defense Forces Chief-of-Staff General Dan Halutz's claim that Israel won "a victory on points, not a knockout" is a valid analogy up to a point.

Hezbollah appears to have lost a substantially greater share of its military assets and infrastructure than Israel. However, there was no reduction in Hezbollah rocket fire because an estimated 95 per cent of the rockets fired at Israel were short-range 107mm and 122mm Katyushas, which are very difficult to detect from the air.

Indeed, there was no observable degradation of Hezbollah military capabilities at all. The quality and endurance of its military performance exceeded Israeli expectations in virtually every domain.

In contrast, Israel's military performance fell well short of expectations. Nevertheless, the war greatly curtailed Hezbollah's freedom to project its military power owing to Israel's strategic and diplomatic successes.

The strategic outcome

The Israeli campaign was intended first and foremost to scare off the tourists - to raise the costs of Hezbollah's adventurism to such a degree that deliberate provocations will not be politically tenable for the foreseeable future. It also enhanced Israeli deterrence of Hezbollah in another important respect.

One of its principal aims, according to Israeli security analyst Yossi Alpher, was "to prove to Nasrallah that civilian Israel is far, far stronger than a spider web" - a reference to the so-called "spider web theory" popularised by Nasrallah, which holds that Israel's dazzling technological superiority masks a weak consumer society that is losing its willingness to make sacrifices in defence of its interests.

Nevertheless, the strategic balance sheet was by no means uniformly positive for Israel. Olmert may have compromised Israel's strategic credibility by initially demanding the unconditional release of its soldiers as a prior condition for a ceasefire, then later dropping the demand.

While Iran's ability to incite anti-Israeli violence from Lebanese soil will be impaired for some time to come, its ability to mobilise other combatants in the anti-Zionist front may receive a boost from Israel's lacklustre military performance.

The diplomatic outcome

Israel's primary diplomatic objective was to precipitate UN Security Council intervention in south Lebanon to block Hezbollah's freedom of action. In this regard, as the Wall Street Journal aptly observed, the governments of Israel, the United States, and Lebanon "were working together off much the same script" in the early days of the crisis.

Resolution 1701, which ended the hostilities in mid-August, was a diplomatic coup for Israel, calling for the deployment of an expanded 15,000-strong UNIFIL peacekeeping force to ensure that Lebanese territory south of the Litani River "is not utilised for hostile activities of any kind [and] to resist attempts by forceful means to prevent it from discharging its duties".