In the arab world, the perception of victory is just as important as an actual victory.
For Israel to "win" this conflict, they have to deliver upon early expectations - whether those be media expectations or claims made early on by the Israeli government.
At this time, Hizbullah is still able to lob near 100+ rockets in Israel each day. Israel has not been able to seize and control much if any Hizbullah/Lebanese territory. Israel, to date, has not created any new buffer zone of any kind. Israel has not been able to effectively degrade Hizbullah's ability to spread propaganda via their TV network or otherwise.
Militarily Israel is clearly doing a fair bit of damage to Hizbullah, but Hizbullah only need run the clock out. Quite simply, time is working against Israel here.
Israel needs to accomplish something that will be clearly regarded as a victory. Something along the lines of infantry and armor racing to the river and declaring a buffer zone, followed by a quick call for a cease-fire and EU/NATO troops to fill the void. Another victory might be finding and killing Nasrallah. If Israel stops now, I believe the best case is that the perception would be that Hizbullah fought Israel to a standstill. Considering it is unlikely Israel gets its kidnapped soldiers back with a prisoner exchange, it is even more likely the victor will appear to be Hizbullah.
Israel definately needs to step up here and make damn sure they significantly diminish the strength and prestige of Hizbullah. As of now, I would say they have not accomplished either.
It is easy to be fooled by the Drive-By Media. Always remember who they are and where their loyalties belong: liberalism. They put their liberalism before their reporting, their country, their faith. They have nothing in common with Israel and reality.
The trick is to look at things as they are, not as your emotions color them. This is a learned behavior, worth having. Liberalism is all emotional reactions, thus it is a gutless choice full of irrational attitudes and responses. You must see your emotional responses as a kind of disease that must be remedied. Fear will make you overestimate the enemy and act defensibly; overconfidence will make you go too far; anger and impatience will draw you into rash actions; love and affection will blind you to treacherous maneuvers, even of those supposedly on your side. War demands the utmost realism, seeing things as they are.
Judge people by their actions. What people say about themselves does not matter; people will say anything. Look at what they have done; deeds do not lie. As a corollary, look at everything other people do as a strategic maneuver, an attempt to gain victory. People who accuse you of being unfair, who try to make you feel guilty, who talk about justice and morality, are trying to gain an advantage on the war chessboard.
As Sun-tzu said, "Being unconquerable lies within yourself."
Let's apply this to Israel: they are applying a Diplomatic-War Strategy (negotiate while advancing). They are bombing Hezbollah relentlessly, ignoring the UN cries for cease-fire--even for so-called humanitarian relief, calling up reservists, Syria blocking off their borders. But, Israel is turning around and 'negotiating' with Rice.
You must see any negotiating situation where your vital interests are at stake as a realm of pure maneuver, warfare by other means. Just as you must always put yourself in the strongest position before battle, so it is with negotiation. If you are strong, take as much as you can before and during negotiations--then later you can give back some of what you took, conceding things you least value to make yourself look good.
Those that believe that niceness breeds niceness in return are doomed to failure in any kind of negotiation, let alone in the game of life. The goal is to make it painful for them to fight. The lesson is simple: by continuing to advance, by keeping up relenting pressure, you force your enemies to respond and ultimately to negotiate. If you advance a little every day, attempts to delay negotiation only makes their position weaker. You are demonstrating your resolve and determination, not through symbolic gestures but by administering real pain. You do not continue to advance in order to grab land or possessions but put yourself in the strongest possible position and win the war.
You have noticed by now that Hezbollah/Lebanon/UN are all begging Israel to stop. As the days go by, their cries become more loud. This is a sign of their weakness, not strength. Time is on Israel's side.
The great British diplomat Harold Nicholson believed there were two kinds of negotiators: warriors and shopkeepers. Warriors use negotiations as a way to gain time and a stronger position. Shopkeepers operate on the principal that it is more important to establish trust, to moderate each other's demands and come to a mutually satisfying settlement. The problem arises when shopkeepers assume they are dealing with another shopkeeper only to find they are facing a warrior.
Israel knows who they are facing.