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Israel and Hezbollah Escalate Military Campaigns

"There can be no illusions: Israel is at war." That's from analysis in today's Jerusalem Post, as Israeli bombs continue to fall in Lebanon and Hezbollah rockets strike cities in northern Israel. Hezbollah's headquarters appears to have been destroyed. Israel says incoming rockets were made in Iran. President Bush today called on Israel to "limit damage to Lebanon... and spare civilians from harm." Arab nations denounced what they called "a barbaric military campaign;" countries from China to Europe expressed concerned about destabilization of the entire Middle East. French President Jacques Chirac called the Israeli offensive "totally disproportionate." What are the prospects for diplomacy before the violence escalates out of control? We have updates from the Middle East and the United Nations.