Israeli PM Ehud Olmert is in the process of blowing every major advantage that Israel had going into this war.
It started the war with a sense of urgency, thinking it had less time than it did. Now, it runs the risk of running out of time, having lately assumed it had more time than it did. Despite diplomatic successes by the Bush administration - the latest being the decision by the UK, Denmark, the Czechs, Poland, and Germany(!) to water down an EU call for a cease-fire to near-meaninglessnes. Nevertheless,
It started the war with an overhwelming advantage in men and materiel. Having used them in dribs and drabs, it has allowed Hezbollah to engage piecemeal, rather than face an irresistable onslaught. Even while keeping a strategic reserve, Israel could have put 70,000 men on the ground, while sealing off Hezbollah's retreat and confronting them from all sides. Instead, Olmert has confined himself primarily to probing frontal assaults, allowing the enemy to redirect its men to the threat of the moment.
It started the war with almost unparallelled unanimity, now it risks destructive political infighting. An generally gloomy email from a friend of mine in Israel cited the unity, or "achdut," as the one bright spot worth mentioning. Olmert has now shattered that by attaching an unpopular and divisive (not to mention strategically suicidal) "convergence" plan as a war aim for a popular and necessary war. Some reservists from the territories are now threatening not to fight, if the purpose of the war is to make politifcal room for Olmert to declare victory and give away their homes.
All of these failures of leadership - and it is a massive failure of leadership - are magnified by Israel's need for at least tacit support from parts of the rest of the world for its efforts. If the US (for instance) concludes that Israel's war aims are muddy, tha Israel isn't seriously pursuing victory, or that it's falling prey to internal battles, it may well change the cost-benefit calculus of the war.