The State of Israel has made it plain that it is going to neutralize Hezbollah one way or another. If that means violating what is technically Lebanese territory, then so be it. Of course, it's not /really/ Lebanese sovereign territory if the Lebanese government can't defend it. A government is only /truly/ sovereign when it has a monopoly of force within its borders. And the Lebanese ain't got that at all.
So the Israelis will pound Hezbollah and see about getting its soldiers back before they get sent to Iran via Syria. This leads to the question of if Syria or Iran will get drawn in. It's important to note that a level of aiding and abetting, they're both neck-deep in this affair already. Hezbollah would be just a little militia making some noise along the Israeli border now and then if it had no funding and no material aid from Syria or Iran. The question is if Israel will be content to focus its efforts on Hezbollah in Lebanon only or if it will consider striking targets in Syria or Iran?
If Israel attacked either one, it would not be the end of the world for Israel. As the Arab-Israeli wars taught the region, Israel can wipe the floor with any Arab military force, even if they all attack simultaneously. The Arabs came close in 1973, but Israel still pulled it out. Attacks on Syria and Iran would not lead to a full-scale military confrontation. And let's acknowledge another fact. Israel has the best domestic security in the world as far as identifying and weeding out terrorists who might want to blow themselves up in the middle of a market. Retaliation of that sort would not be a terrible burden on Israel as it could certainly deal with it and cope.
Escalation would take the form of instability around the region as hardcore Arab nationalists/Islamists make a lot of noise and stir up trouble. The principal theater for such trouble to make itself known is of course Iraq.
I don't want to guess how things will play out in that kind of situation.
The Holy See had its usual announcement on the situation:
VATICAN CITY, JUL 14, 2006 (VIS) - Cardinal Secretary of State Angelo Sodano today made the following declaration on Vatican Radio:
"The news we are receiving from the Middle East is certainly worrying.
"The Holy Father Benedict XVI and all his collaborators are following with great attention the latest dramatic episodes, which risk degenerating into a conflict with international repercussions.
"As in the past, the Holy See also condemns both the terrorist attacks on the one side and the military reprisals on the other. Indeed, a State's right to self-defense does not exempt it from respecting the norms of international law, especially as regards the protection of civilian populations.
"In particular, the Holy See deplores the attack on Lebanon, a free and sovereign nation, and gives assurances of its closeness to those people who have suffered so much in the defense of their own independence.
"Once again, it appears obvious that the only path worthy of our civilization is that of sincere dialogue between the contending parties."
When Cardinal B. comes into office, I sure hope he can come up with some statements that are a bit more interesting than that. The Middle East is going to hell in a handbasket and the Holy See can only reiterate its condemnation of terrorist attacks and military reprisals along with other filler before and after. I don't see any mention of the fact that the Holy See stands with Israel in defending its sovereign borders and independence when terrorists cross the border to attack Israeli soldiers and then kidnap two of them to haul back to Lebanon. Fair is fair, right?