"...in effect handed the victory to Israel. In acknowledging that he had erred in estimating the likely Israeli reaction and that he had not foreseen the devastating consequences for Lebanon, he asserted that Israel's deterrent power had not been eroded by the war, but enhanced."
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IMO
An outright lie. Lies & deception they are best at.
A political statement issued to deflect internal criticism.
I agree that it is an outright lie - but not for internal purposes (at least not primarily). This will have the effect of bolstering Olmert - who, IMHO, is a bumbling appeaser who handed a great political victory to Hezbollah and a stunning political defeat to his own nation, and who has betrayed the brave soldiers of the IDF and the unfortunate soldiers who have been kidnapped.
Nasrallah may be many things, but stupid isn't one of them. He wants the Peres-advised Olmert to remain in power, and to keep a labor organizer as the head of the Israeli defensse establishment...and what better way to ensure that than to whine about how the "big, bad Jooos kicked our asses?" Guaran-f'ing-teed, Olmert & Co. will be crowing all over the place about this.