Is Israel Ready To Up The Ante?

This story was written by CBS News correspondent Allen Pizzey in Tel Aviv, Israel.

There are growing indications here that Israel is at the point of escalating the conflict in Lebanon.

The security cabinet is scheduled to meet Wednesday to discuss the situation, and rumors are rampant here that pushing further and harder into Lebanon is in the cards. The rumors have been fueled by an army statement that the chief of the defense force, Lt. Gen. Dan Halutz, has appointed his deputy, Maj. Gen. Moshe Kaplinski, to "coordinate military efforts in Lebanon" — effectively sidelining the head of the northern command, Maj. Gen. Udi Adam.

The Israeli media linked the change to plans under discussion to step up the offensive — and to growing public criticism of how the army is faring against Hezbollah guerrillas.

At the same time, the chances for diplomacy have not been completely ruled out. A proposal by the Lebanese cabinet to deploy up to 15,000 troops into southern Lebanon after an Israeli withdrawal has been greeted with — if not enthusiasm — at least interest by the Israeli government.

Prime Minister Ehud Olmert called the decision, "an interesting step." He said his government would study it "and examine and look at all the implications to see to what degree it is practical and in what time frame."

The time frame issue is critical. Israel will not accede to any plan that falls short of putting Hezbollah out of the business of firing missiles onto Israeli cities.

Speaking to AP Television News in an interview in London, former Israeli Prime Minister Benjamin Netanyahu said that unless Hezbollah was disarmed there would be "a temporary lull between rounds," not really a cease-fire.

"We really don't address the problem and its fundamentalism until we get the international community to press vigorously on Iran and Syria to stop re-supplying Hezbollah, and until Israel dismantles most of Hezbollah's fighting ability," Netanyahu said.

Israel still believes it is the only force capable of doing that, and seems willing absorb casualties to accomplish that goal. There have been no significant anti-war protests here, and no calls for the war to be cut short of what the Israelis can call a victory.

Mounting casualties were one of the reasons given for Israel's withdrawal from Lebanon in May 2000, after 18 years of occupying a large portion of the south.

Hezbollah may have gambled that the same would apply this time. If so, they got it wrong, at least so far.

But then again: When this war began Israel had no reason to think that four weeks into the fighting, its troops would still be engaged in bloody battles with Hezbollah within firing distance of the border.