i vote #1 also, don't think Olmert yet is ready to bump this up a notch (not sure if he ever will), not sure how much of a blackout we are going to see, just heard CNN mention it.
Israel has a coalition goverment, and it is inherently unstable. That means, if Olmert does not act tough, his government will fall.
This is an excellent time for a hawk to seize power in the goverment.
Perhaps Bibi?