The more I think about this, the more it seems like Israel just wanted to go ahead and at least show its teeth to the Arab world around it. Israeli special forces are some of the nastiest in the world. Conducting a search for missing soldiers could have been completed by now, and it wouldn't involve the image of explosions in urban areas and innocent Lebanese deaths (a lot of people are blurring the Hezbollah/Lebanon line when complaining about the coverage).
This isn't to say that I disagree with it. Unlike us, Israel is literally surrounded by a lot of people that don't like it. We're worried about terrorist infiltration, but at least Iran, Syria, Pakistan and Afghanistan don't border us. A proactive move was the best course of action in terms of securing a long-term peace, believe it or not. Yeah, civilians are dying, but this is as surgical an air campaign as one could hope for in 2006. It's not like the majority of things blowing up are people. Don't forget roads and other infrastructures that are being blown to holy hell. Eventually these extremist groups will be seen as ineffectual and nothing but trouble, lose support when they get blown away, and we can go back to the business of fixing things within Israel again.
I'll even say they're right to refuse a cease-fire. Hezbollah is too good to give them 72 hours to regroup. They're not a bunch of scrubs with makeshift explosives, they're quite professional.