A week after Hezbollah fighters captured two Israeli soldiers in a cross-border raid, triggering the Israeli campaign and Hezbollah rocket attacks, the BBC News website's World Affairs correspondent Paul Reynolds looks at the positions of the various parties.
Israel appears intent on pressing on with the military offensive
The Israelis are confident they have a green light from the Americans to carry out air and artillery strikes for the time being.
How long they will take may depend more on the results than a timetable.
They have variously said they will need 10 to 14 days or even weeks.
Israel intends to destroy as much of Hezbollah's capability - much of that in missiles - as it can, though air power has its limitations. Its attacks, it says, are directed at targets connected to Hezbollah.
Above all, Israel will not accept a return to the status quo under which Hezbollah was stationed along Israel's northern border.
In the American view, Israel should be allowed some time in which to reduce the power of Hezbollah
Israel wants the Lebanese army to deploy to the south and Hezbollah to be disarmed in line with Security Council resolution 1559. It wants at the very least a buffer zone, even though remaining or re-supplied Hezbollah rockets could be fired over that in any future conflict.
It also wants the return of its two captured soldiers - and a third one held in Gaza. It has previously said it is ready to release some Palestinian prisoners so they might be added to an eventual package.
The Israeli attacks have caused civilian casualties and Israel is prepared to accept that they will, though it says it tries to minimise them. The casualties have opened Israel to charges of being disproportionate, of breaking the Geneva Convention banning attacks on civilians and of threatening the stability of the Lebanese government and state.
There has been no general ground invasion of southern Lebanon and Israel says it does not intend to attack Syria or Iran though it accuses both of helping Hezbollah.
Hezbollah's tactics are to cause maximum civilian casualties, to spread fear and to inflict damage in Israel.
Its intention in crossing the border and capturing two Israeli soldiers was hinted at in a statement it released at the time. This referred to "fulfilling the promise to liberate its prisoners" held by Israel.
There have been prisoner exchanges before, as in 2004, when Israel released 436 Palestinian, Hezbollah and other prisoners and 59 bodies in exchange for one Israeli civilian and the remains of three soldiers.
Hezbollah has carried out such an attack before, so it has a track record in this tactic. In October 2000 it captured three Israeli soldiers and took them into Lebanon. It is thought, however, that the soldiers died in the ambush.
Hezbollah must have realised that in view of the Israeli reaction to the earlier capture of its soldier by Hamas and its announced refusal to negotiate, that a strong Israeli response would be expected. If it did not realise this, it might have miscalculated.
He [the Lebanese PM] fears that this government will fall apart and that Lebanon will split along sectarian lines again
On the other hand, it might have thought that it could withstand, cover and benefit from the onslaught and that, at the end of the day, Israel would have to negotiate for its soldiers.
It might also have wanted to show solidarity with, and taken the pressure off, Hamas in Gaza.
Whether it was acting under instructions from Iran to divert attention from the Iranian nuclear issue before the G8 summit as Israel has alleged is not known.
The United States:
President George W Bush openly blames Hezbollah for the crisis, and beyond them its supporters Syria and Iran. In the American view, Israel should be allowed some time in which to reduce the power of Hezbollah.
Many Lebanese fear their country is being wantonly devastated
This explains why there has been no intervention by the US. When that reduction has been accomplished, the diplomacy can kick in.
But it agrees with Israel that there can be no return to the previous situation whereby Hezbollah watchtowers were overlooking the Israeli border with Lebanon.
The US is however concerned about the effect of the air war on the Lebanese government.
The US Secretary of State Condoleezza Rice will travel to the region but only, she says, when the time is right, which means that she has to be able to shape a future settlement that would help avoid another round of fighting.
The Lebanese government:
The Prime Minister Fouad Siniora was in tears on television appealing for the UN to prevent a "disaster" for his country.
Mr Siniora is an anti-Syrian Sunni Muslim former finance minister who has presided over a coalition government comprising reforming elements of the "Cedar Revolution" with, for the first time, Hezbollah, whose right to "resistance" he has recognised.
He fears that this government will fall apart and that Lebanon will split along sectarian lines again - and that in any case is suffering unacceptable casualties and damage.
The United Nations:
The UN wants implementation of Security Council resolution 1559 of September 2004.
This calls in particular for "the disbanding and disarmament of all Lebanese and non-Lebanese militias" and "the extension of the control of the Government of Lebanon over all Lebanese territory".
Europe has called for Israeli restraint
However the resolution has never been implemented due to the difficulties involved.
So the UN, supported by Britain, is now proposing that an international force be inserted into southern Lebanon. This would have powers beyond the monitoring ability of the current 2000-strong UN force there, Unifil.
A UN team has been to Beirut and Israel to discuss the plan.
Iran and Syria:
They have both backed Hezbollah for a long time and are thought to be the source of the rockets in Hezbollah's arsenal.
Their role in the current crisis is unclear, though Israel has accused Iran of directing the prisoner capture as a way of diverting world attention from its own nuclear issue.
Iran sees Hezbollah as co-religionist Shias fighting a just cause against Israel whose existence as a state it opposes.
Syria largely controlled Lebanon for years and has only recently lost influence there so it might see Hezbollah as a way of retaining some presence and a pressure point on Israel.
Iran and Syria themselves are long-time partners in the Middle East and both opposed former Iraqi leader Saddam Hussein.
Britain has sympathised with Israel more than for example France, which sent Prime Minister Dominique de Villepin to Beirut show its sympathy.
Britain, like the US, feels that the basic instability of having Hezbollah so powerful and so close to Israel must be removed if long-term peace is to be achieved.
However the EU has collectively - through its foreign policy representative
Javier Solana - told Israel to be more restrained and that its attacks have been disproportionate.