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.
Don't forget they are also slowly neutralizing the US in Iraq, as that country moves inexorably toward a civil war in which Syria gets the Sunni section and Iran the Shiite section. After that, the Saudis and Kuwaitis fall, and then the rest of the ME.
It will make Barbary look like kid's stuff. Sadr and Nasrallah may emerge as the greatest pirates in history.