While the provocation of hostilities falls squarely on the shoulders of Hezbollah (and in the case of Gaza, Hamas), Israel misprosecuted the war. That was bad enough. Worse is the "diplomatic" efforts to achieve peace that apparently the world isn't really behind. The United Nations comes in, promises peace, and then doesn't meet the basic troop levels it commits to. It has taken weeks to muster only about half the troops they agreed to have. The result is that Hezbollah wins.
There was much discussion about the Hezbollah declaration of victory against Israel. While on its face it appears absurd, on deeper inspection, they are absolutely correct. Hezbollah did win.
If one's definition of victory is simply hammering an adversary into submission, neither side could claim victory. If the definition is inflicting damage, surely Israel won. Hezbollah, using dumb-fire rockets, couldn't manage to inflict any real discernible damage on Israel (well, except they did hit a few cemeteries). However, if you define victory as achieving military objectives, Israel certainly failed and Hezbollah certainly was victorious.
Israel's objective was to crush Hezbollah, or at least move them far enough north to be no real military threat. By any assessment, Israel inflicted little lasting damage on Hezbollah except to make them waste a bunch of rockets that Iran will replenish at their earliest convenience. Israel certainly did not respond in any meaningful way to the actual sources of Hezbollah aggression, namely Syria and Iran.
Hezbollah, on the other hand, didn't appear to have any illusions of defeating Israel militarily. They seem to know full well that Israel will not be wiped off the map with tanks and bombs. They wage their war in the media and the chambers of the United Nations and wield the weapon of diplomacy with great success. Their objective was to not be defeated and gain political clout. They wanted to project an image that they could not be defeated militarily and need to be negotiated with. They achieved these objectives with resounding success.
Despite the media being fully aware and fully informed that most of the information coming from Hezbollah was doctored for effect, the media willingly complied. The embedded reporters with Hezbollah produced puff piece after puff piece about Hezbollah social workers. One can whine about media bias all they want. When it comes to war, one needs to deal effectively with the tools of the enemy. Bitching never won a battle.
Hezbollah mounted an army of public relations specialists who were more powerful than any weapon in their arsenal. Put simply, they won the hearts and minds in Lebanon, in the Arab World, and much of the West (particular those left-leaning). Hezbollah's clout increased dramatically as a result.
Now, theoretically, if the UN managed to deliver what is promised, if they could get 15,000 additional troops on the southern border with Lebanon, if they can deal with the Syrian border, if they can halt arms transfers from Iran, if they can effectively displace Hezbollah, then Israel and Lebanon will both be better off and democracy will thrive in Lebanon. If… if… if…
From the looks of the international community, it doesn't appear likely that the UN will even be able to muster those troops needed, which certainly calls into question whether they will succeed. Independent of troop levels, UNIFIL in Lebanon has never been successful and it is questionable that simply more warm bodies will do anything to help. As usual, the United Nations and the international community's bloviation on peace never quite matches up to what they actually end up doing. In a perfect world, the United Nations might be able to do something. However, in this world, the United Nations is more talk and no walk. That is, when they aren't being generally corrupt.
The result? If the UN fails, and it appears that it will, Hezbollah will not only be more powerful on the foreign scene, they will be more powerful domestically. Lebanon recently threw off the shackles of Syrian oppression and was rightly highlighted as a beacon of democratic hope in the Middle East.
Hezbollah is nothing more than Syrian power projection in Lebanon. If Lebanon could have dealt with them, they would have done so long before rockets started falling on Israel. Increasing Hezbollah's domestic power will result in the democratic advances made in Lebanon being turned back. In short, Lebanon will go the route of Palestine and put Hezbollah in power. Syria will be back in control of Lebanon and Lebanon will descend firmly into anti-Semitic fascism.
This descent was put into motion by Israel not fighting the war the way it should have been fought and it was solidified by the United Nations promising what it never could deliver. Israel had good cause to act militarily. However, by not engaging their enemy as they should have, they leave Lebanon on the road to democratic collapse.