So, UPD as od 1:30am.
I'm at my parents' because they have air conditioning and I don't :P
The weather is terrible.

The situation is very delicate and really getting to the state of chess game. Just look at the players :

Syria : Syria reports that IDF attacked targets on the Syrian border. IDF doesn't say a word and I know for a fact that it's not true(as I have mentioned I have a friend in Lebanon who updates me everyday so I know he's ok), at least not the ground forces. Assad seems to have his plans.
Can't say about AIF, haven't heard jets above Haifa today but that means nothing. But true or not, Syria wants to keep the corridor for entering the conflict.
On the other hand, USA wants Syria to take place in the peace process in Lebanon, therefore Assad has to decide where he heads. Allegely, Syria is promised aid from Saudi Arabia if they in fact affect Hezballah and stop the conflict. Lebanon itself is not interested in Syria involved, much like Israel.

USA : USA presents a plan for a ceasefire. Basically there are two stages :
1)International forces take over south Lebanon
2)The problem of the abducted soldiers is being solved (whatever that means, the anatists say that Olmert begins to weaken his positions on the issue, as I predicted)
Later :
3)Lebanese army takes over South Lebanon
4)HA becomes part of the officail Lebanese army
5)Talks between Israel and Lebanon regarding Lebanese prisoners in Israel and Chebaa farms.

US does not take part in the process and will not send its troops to Lebanon.
The first part of the plan depends on how fast UN/NATO react. The seacefire can come as soon as next week.

UN/NATO : Second country joins in as a possible force (the first was Portugal) - Turkey. Actually, Turks are perfect for the job, because they are Muslims, Western, part of EU, in very good relationships with Israel and have their own interests in Lebanon.
The worse news are that they also want Syria involved.

1)IDF : IDF has finished the operation in South Lebanon and doesn't plan wide operations until there's the decision on the political scene. For now the reservist forces are ready but they will not be used in the following several days, giving Olmert time to decide about the next steps. But in the meanwhile it's going to make small strikes with ground and air forces over HA facilities. The subtile point here is to hit HA as much as possible while keeping the illusion of a halt in the operation.
In addition there's the possibility that IDF will have to have presence until UN/NATO kick in.
2)Olmert : Olmert gives up on the UN resolution regarding disarming HA. Israel is likely to be content with HA moving north from the international border. In the meanwhile Israel is ready to stop the fights and begin talks, but it's in the interests of Hezballah as well and therefore the Israeli government will have to do something that will take Nasrallah out of the "victors" list. The good news are that the talks will be done with Siniora without interference of Hezballah and only AFTER Israel's basic demands are fullfilled.

Lebanon : the current plan is perfect for Lebanon. They get aid for the army, weaken HA, stop the fighting, take over all of their lands, keep the government standing and keep the chances to prevent the civil war. Siniora right now is in a very good position.
However he has to do his best to take the credit from HA and watch for the possible oucomes in the form of fights between the different populations. Today the leader of the Druze community in Lebanon compared Nasrallah to Hitler and said that Hezballah acts against the interests of Lebanon (which is true, actually). After Israel is off the scene, Christians, Druzes and Sunites might start acting against HA and Shias. Theoretically this looks like a good outcome for Israel, but practically I'm afraid they will lose; I doubt Israel is interested in civil war in Lebanon (not to mention Siniora).

Hezballah : Nasrallah wants ceasefire urgently. He has already lost in a sense because seems like HA is going to give up its position as the rulers of South Lebanon and might lose its independence as a milita. But OTOH it won't be disarmed, which is a major victory for them. He mentions Christians in his rhethorical speach (where he tells beautiful legends about IDF losses) and joins them in as fighters against Israel, thus 1)getting the credit as a victor; 2)prevents HA from being attacked by the Christians after the war is over. So, going back to Lebanon and Israel, while all three are interested in the ceasefire, the benefits that the others get, might cause them to prefer "some more fighting".
And finally, IDF expects HA to do something BIG when ceasefire is achieved, as a "hasta la vista baby". The expectation is that 10 minutes before the official stop of the war, HA will fire its long distance rockets attacking cities south of Haifa, like it did the previous time. Therefore as the end is getting closer, IDF raises the alert in Sharon and Tel-Aviv area + it's possible that no official ceasefire will be announced.

Ufff...
Now, go figure yourself what's going on here.
If my life wasn't on stake, I'd probably even enjoyed the complexity of the problem in the mathematical way.