If we think the appeasement strategy is misguided, wait until we see the post-appeasement strategy, which will involve paying off blackmailers who can hurl nuclear bombs and issue passports.
back to Barbary?
This screams of "saving face". Pulling back now will be an utter catastrophe. The morale boost for Syria and Iran will be stratospheric if they realize they can neutralize Israel with stinkin' HEZBOLLAH. It will give them ample time to position their little chess pieces and strangle Israel while completing their nuclear program.
I think a coup within the military is not out of the question, and Olmert's government could be tossed out, too.