Only a temperory occupation ( one month or two) will be considered a defeat for Hizballah. These incursions that Israel is doing even if it is effective will not break Hizballah. Olmert is weak, very weak, I really despise him. In time of war only men of war can win, men of peace like Olmert must step aside and let the men of war win the war.
Leaders evolve during wars, no one is born to it.
If nothing significant happens by say, noon Monday EDT, I am inclined to agree with you, but recent events raise the possibility that Olmert, probably with a bit of help from his cabinet, may have found his stride.
We'll see.