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From a different thread. It looks like they chose #4. They're finished.

Israel has the following options:

1) Try a war of attrition against the Hezbos.
2) Aggressively seek to wipe out the Hezbos.
3) Attack and occupy Syria.
4) Sue for "peace" or a cease fire.
5) Flatten the Middle East (i.e., nukes)
6) Have and International Force to disarm the Hezbos
7) Head to New York.

Viable options are (3), (5), and (7) presently (and 3 may be difficult to maintain if others get in).

Why not other options:

1) With its supply line basically intact, the Hazbos have an unlimited supply of weapons, animals, and time to keep Israel engaged. Their newer missiles will make more and more of the country unusable.

2) Even a full occupation of Lebanon would mean the Hezbos simply moving east and constantly attacking from Syria. It would be very hard for Israel to maintain the occupation for any length of time.

4) Certain death for Israel if they cut a deal. It would simply mean a defeat for Israel. The Hezbos would then re-arm with MUCH stronger weapons and attack at their will. Additionally, it would impossible for Israel to maintain normal functioning as long as the Hezbos are there. The country would simply wither on the vine.

6) An effective international forces cannot happen. The only two countries that would actively prevent the Hezbos for re-arming are the US and Israel, and the Hezbos can simply re-arm north of the demarcation line. An international force would have to occupy Lebanon and be subject to the same harassment as in Number 2.

Israel has some hard choices to make if they want to remain in that part of the world.