The war should be against Hesbollah, not Lebanon govt (I think Israel is not making it clear enough). Unlike al Quaeda, Hesbollah actualy controlls some definte territory, a territory where Lebanese Army does not go. The solution, I think, is to kill everything armed in that territory, and hope that the Lebanese govt will retain the control beyond it. If we are really lucky, Lebanon will disarm Hesbollah after it's sufficiently weakened by Israel. They wanted to do it for long time, but they have no resources to do it.
Yes, many civilians will die. But the choice now is only between whose civilians will die, and when. There is no way to spare everybody. Unfortunately, this is a new property that the war aquired in 20th century. Civilians are no longer immune. That's what makes the very word "war" anathema to us. But the war will be waged, if not by Israel, then on Israel. And may be, soon, if not by us then on us. Actually, I am wrong. bin Laden did say many times that he is at war with us. His limitation is lack of capability, not lack of will.