According to Saudi King Abdullah, war may be inevitable in the middle east if Isreal doesn't stop it's "brutal" defense of its own borders. This warning has strong echoes of a 1945 meeting between FDR and King Aziz (the founder of Saudi Arabia). In their meeting, which took place within the last two months of FDR's life, King Aziz urged the US President not to support the creation of a Jewish state. Doing so, he warned, would create an infinite war. The King explained that he wishes to have strong ties to the United States, and participate in a league of nations, but if a Jewish state was created, he would have to takes sides with his Arab brothers.
In my opinon, the existence of Israel is as irrelevant of a debate as is the decision to invade Iraq. Both decisions have been made, and now we are left with the consequences. Perhaps if both decisions were made differently, the outcome would have been much more favorable, but that "if" tell us approximately nothing about how to deal with Hizbollah or Muqtada Al-Sadr.
This is purely a religeous war, and no amount of PC can sidestep that issue. State sponsors of Islam are also supporters of the destruction of Israel.
The first thing the west can do is ensure that the Lebanese government takes control of its own country, and removes Hizbollah permanently. If the conflict continues beyond that, then it will either prove Israeli aggression, or prove that someone else is behind the attacks on Israel. Fortunately, Arab moderates (King Abdullah included) will likely suggest this step as they discuss the issue with the world in Rome.