Israeli opposition politicians have called on PM Ehud Olmert and his defence minister to resign.
Ehud Olmert has been weakened by the conflict
This follows the resignation of the head of Israel's armed forces, Lt Gen Dan Halutz, over the handling of the conflict in Lebanon.
Mr Olmert and Amir Peretz should share the blame for failures in the conflict with the militant Hezbollah movement in 2006, the opposition figures said.
Gen Halutz said he was taking responsibility for the mistakes made.
The conflict ended without Israel achieving its main aim, the release of two soldiers captured by Hezbollah in a cross border raid into Israel.
The Lebanese militant group described Gen Halutz's resignation as proof of its victory over Israel.
Inside Israel, the focus of blame is shifting from the military towards the government.
"The chief of staff's resignation officially confirms the failure of the Lebanon war and compels the prime minister and the defence minister to stop holding on to their positions and resign from their posts," said Yisrael Katz of the right-wing opposition Likud.
Gen Halutz said he wanted to assume his "responsibilities" after a war which has been widely criticised for failing to crush the anti-Israel militia.
A military inquiry is now over, but the government's handling of the 34-day conflict is still being investigated.
The resignation is the latest in a series of setbacks for Mr Olmert.
Hours before Gen Halutz made his announcement, the justice ministry ordered a criminal investigation into Mr Olmert's role in the privatisation of the country's second largest bank in 2005.
Israel attacked the Lebanon-based Hezbollah after the group captured two Israeli soldiers in a cross-border raid last July.
WAR IN LEBANON
Began on 12 July 2006 and lasted 34 days
Israeli deaths: 116 soldiers and 43 civilians
About 1,000 Lebanese killed, mostly civilians
Extensive damage to infrastructure, thousands of homes destroyed
But it failed to free the soldiers or destroy Hezbollah before a ceasefire ended the fighting in August, with Hezbollah leader Sheikh Hassan Nasrallah claiming a strategic victory over Israel.
About 1,000 Lebanese were killed in the conflict, mostly civilians in Israel's vast bombardment of the county and land invasion in the south. Lebanon's infrastructure also suffered extensive damage.
The Israeli army lost 116 soldiers. Forty-three Israeli civilians were also killed by more than 4,000 Hezbollah rocket attacks.
Several other senior army commanders have also resigned over the handling of the war.