A common analysis, but wrong. They knew damn well they couldn't win militarily. What they were hoping for was a repeat of Kosovo, with US and UN peacekeepers carving the heart out of Israel, while acting as human shields allowing the war against Israel to continue without fear of reprisals.
But they didn't count on Bush winning the election, and they didn't forsee that 9/11 would turn American public opinion so far against them. And in any case, it was impossible to force a Kosovo against Israel, due to its virtually unbeatable air force and its nuclear capability.