Possibly this story is partially true, but the victims were really killed in a bombing by Hizbollah and then a false story was fed to the media and the UN officials. Another possibility is that a convoy was bombed by the Israelis but the victims are not all innocent people and some top Hizbollah leaders were in this convoy and attempted to use the innocent people and children as shields to prevent an Israeli attack. (This could be more of the "cynical use of children" that Israel talks about.)
I think it's highly unlikely that Israel bombed a convoy of entirely innocent civilians. The Israelis are very good at gathering intelligence and doing surgical airstrikes that absolutely minimize civilian casualties.