For me this is the crux of the issue. Numerous historical precedents have been set, the most relevent perhaps going back to the bombing of cities during the second world war. Modern warfare is about more than soldiers facing off against each other, it's about destroying your enemy's ability to feed and care for its population, or as the military cynically expresses is "destroying the will to fight"
Israel does have the right to defend its territiory, I doubt any of us would argue with that. What Israel does not have the right to do is economically devastate its neighbour in the manner in which it has, particularly given that its stated enemy is not the actual governemt of that neighbour but a minority political force within it.
The international community has spectacularly failed to fulfill its humanitarian obligations to the Lebanese people by failing to insist forcefully if necessary that Israel deploys a force which is proportionate to the enemy which it faces, and that said force does not simply use its airpower to go after the Lebabnese infrastructure as a way of isolating their enemy. Had they done so [and had the Israelis actually agreed] I doubt there would have been a conflict on this scale, since as has been pointed out it is questionable whether there is the political will in Israel to sustain large numbers of casualties for the sake of pushing a few Katusha batteries back a few miles.
Now unfortunately it appears that it will be necessary for NATO/UN troops to risk their lives on foreign soil yet again, and for the Lebanese to concede hundreds of square miles of their land in order to appease the Israelis, and give them a "buffer zone" betweent them and their enemy. IMHO if thei Israelis want a buffer zone that badly then they can evacute northern Israel to a distance of 50 miles from their border and create one.It is the Israelis who until they are forced to abandon the agressive fortress mentality which is ingrained into their entire social fabric will continue to be the thorn in the side of the Arabic world, and whilst they are not responsible for every war/atrocity and do not validate the existence of Arab extremism/terrorism they will continue to be a potential flashpoint for as long as the international community panders to them and continues to prop them up and make them the strongest military power in the region.