In From the Cold sketches out the strategy he feels Israel will pursue in Lebanon. In his view Israel's goals are limited. Remove the rocket threat, isolate by air and then destroy the Hezbollah by ground assault; then finally redeploy to Gaza and complete the effort to retrieve Gilad Shalit. In his view the attacks on Hezbollah's rocket batteries are already reducing their ability to launch. Syria may be tempted to intervene, but then again they may sit it out. Darkening the scene from a distance is Iran.
There are, of course, some wild cards in the equation. The sudden execution of one (or all) the Israeli soldiers would prompt an even greater escalation by the IDF, and a possible expansion of its area of operations (think airstrikes against Damascus). Then, there's the Iran factor. Tehran has already indicated that an attack against Syria would be considered an attack against the wider Muslim world, suggesting that it would come to the aid of its ally. Iran's threats aren't entirely hollow, but it's military options are limited to (1) more terrorist attacks, (2) missile strikes against Israel, or (3) a long-range airstrike, using F-4 or SU-24 aircraft. The potential damage from these attacks would be limited (except if WMD were used), but the long-term consequences for Tehran would be exceptionally grave.
I believe In From the Cold wrote this post before the full extent of Iran's technical assistance to the Hezbollah became clear. However, it doesn't change his basic assessment, which is that Israel can handily defeat Hezbollah -- unless Iran or Syria come to its rescue -- what he called the Wild Cards. The deck is being dealt and we will turn over some extra cards in the following days.