Israel and Hamas

In effect, Israel never did really have a chance to "kick the crap out of Hamas" (or eliminate them, in other words). Israel has already assassinated several Hamas leaders in the past (most famous are Ahmed Yassin, and Abdel Aziz Al-Rantisi). These assassinations might have arguably harmed Hamas' capabilities for some period, but was far from totally incapacitating it. In fact, some may argue the assassinations only made Hamas more popular within the Palestininans, which led to their victory in the 2006 elections.

This also apply when asking why didn't Israel assassinate Nasrallah at his first public appearance after the war. It its most likely that by doing so, Israel had more to lose than to gain. It is highly unlikely that Israel could really eliminate the Hezbolla by killing Nasrallah. On the other side, this would probably re-ignite the violence between the two sides, and get Israel condemned by the international community.

The way I see it, nearly the entire world is extremely aware of Israel's military abilities. People on both sides are, or at least, were, convinced that Israel has the capabilities to eliminate any possible threat to it. In my opinion, there are two major factors preventing this.

• International Opinion: Israel has always longed to be a fully accepted member of the global community. As a developed country, Israel is held back by the numerous international charters is has joined. Existing in such a politically volatile area, while being the only fully democratic government in the area, exposes Israeli actions to both international and internal scrutiny in its dealings. Poor international representation (the fabled hasbara) had led to a global conviction of Israel being a bully. Israel is suffering from what is known as a "weaker strong country". Think America's failure in Iraq. Israel cannot use its strength against a guerilla army.
• Lack of internal cohesiveness: Israel has become a neo-liberalistic democracy. Valuing human rights (which is in itself, obviously a good thing) has overshadowed the raison de' etre. When a state can no longer freely act in its defense and suffers from internal issues, it cannot commit itself to defense. A poorly created defensive strategy, a lack of initiative and too many "doves" held back Israel's hand. Ironically, this will make Israel appear weaker, bolstering Nasrallah's confidence and undoubtedly leading to more and more skirmishes to look forward to. Yay.