As I stated previously, Israel cannot do prisoner swaps as this will only lead to more kidnapping. This goes for Hamas and Hizbollah.
Outside of Hizbollah handing back the soldiers and signing a peace treaty (something that is about as likely as me winning the lottery tonight), Israel now has to forget about outside opinion. I haven't seen outside opinion as being too loving towards Israel anyways. This is about survival. Not just through 2006 but to at least 2036
(I hope deep down that radical Islam is defeated by around then).
My solution isn't pretty because I don't think the Arab nations understand anything but death and destruction. We can see now that Iran isn't building nukes for deterrant reasons.....they will have no problem launching them at Israel for any reason they see fit.
First, Israel should continue crippling Hizbollah in Lebanon, until no more rockets are fired. But more likely, Syria will enter the war. Beautiful. Israel should cripple Syria. Then hopefully Iran will officially enter the picture. This will give Israel the green light to blow up everything they need to
blow up in Iran, and while they are at of course, they need to blow up Ahmadinejad, into tiny little pieces.
I know this solution won't sit well with many so if anyone has a better solution (please, no need to tell me what Israel shouldn't do if it isn't accompanied with a valid long term solution as well), lets hear it.
Here are a couple of solutions I found while surfing.
Sandmonkey thinks the IDF has done the wrong thing, and
Yael K offers a less messier (than mine) solution.

Sad but true from
the Dry Bones Blog.
One possible short term solution is the forced returned bodies dead or alive(I think they are dead by now) of the Israeli soldiers, with no prisoner swap in return, only a peace treaty. This will just be another bandaid solution. Oh did I forget about how to deal with Hamas and those who voted for them? One dilemma at a time.
I think this war is inevitable though, and unfortunately necessary. Israel needs to do the West's bidding and try to rid terrorists in 3 regions over the next few weeks, maybe months.