1) Israel's existence is not at stake and hasn't been so for decades, if it ever was, regardless of the many de rigueur militant statements by Arab leaders over the years. If Israel would learn to deal with its neighbors in a non-expansionist, non-military, humane, and respectful manner, engage in full prisoner exchanges, and sincerely strive for a viable two-state solution, even those who are opposed to the idea of a state based on a particular religion could accept the state of Israel, and the question of its right to exist would scarcely arise in people's minds. But as it is, Israel still uses the issue as a justification for its behavior, as Jews all over the world use the Holocaust and conflating anti-Zionism with anti-Semitism.
In a conflict between a thousand-pound gorilla and a mouse, it's the gorilla which has to make concessions in order for the two sides to progress to the next level. What can the Palestinians offer in the way of concession? Israel would reply to that question: "No violent attacks of any kind." But that would still leave the status quo ante bellum -- a life of unmitigated misery for the Palestinian people forced upon them by Israel. Peace without justice.
Israel's declarations about the absolute unacceptability of one of their soldiers being held captive by the Palestinians, or two soldiers being held by Hezbollah in Lebanon, cannot be taken too seriously when Israel is holding literally thousands of captured Palestinians, many for years, typically without any due process, many tortured; as well as holding a number of prominent Hezbollah members. A few years ago, if not still now, Israel wrote numbers on some of the Palestinian prisoners' arms and foreheads, using blue markers, a practice that is of course reminiscent of the Nazis' treatment of Jews in World War II. 
In addition to doing away with the Hamas government, the current military blitzkrieg by Israel, with full US support, may well be designed to create "incidents" to justify attacks on Iran and Syria, the next steps of Washington's work in process, a controlling stranglehold on the Middle East and its oil.
It is a wanton act of collective punishment that is depriving the Palestinians of food, electricity, water, money, access to the outside world ... and sleep. Israel has been sending jets flying over Gaza at night triggering sonic booms, traumatizing children. "I want nobody to sleep at night in Gaza," declared Israeli Prime Minister Ehud Olmert; words suitable for Israel's tombstone.
Since 9-11 it has been a calculated US-Israeli tactic to label the fight against Israel's foes as an integral part of the war on terror. On July 19, a rally was held in Washington, featuring the governor of Maryland, several members of Israeli-occupied Congress, the Israeli ambassador, and evangelical leading-light John Hagee. The Washington Post reported that "Speaker after prominent speaker characteriz[ed] current Israeli fighting as a small branch of the larger U.S.-led global war against Islamic terrorism" and "Israel's attacks against the Shiite Muslim group Hezbollah were blows against those who have killed civilians from Bali to Bombay to Moscow." Said the Israeli ambassador: "This is not just about [Israel]. It's about where our world is going to be and the fate and security of our world. Israel is on the forefront. We will amputate these little arms of Iran," referring to Hezbollah.
And if the war on terror isn't enough to put Israel on the side of the angels, John Hagee has argued that "the United States must join Israel in a pre-emptive military strike against Iran to fulfill God's plan for both Israel and the West". He speaks of "a biblically prophesied end-time confrontation with Iran, which will lead to the Rapture, Tribulation, and Second Coming of Christ." The beatification of Israel approaches being a movement. Here is David Horowitz, the eminent semi-hysterical ex-Marxist: "Israel is part of a global war, the war of radical Islam against civilization. Right now Israel is doing the work of the rest of the civilized world by taking on the terrorists. It is not only for Israel's sake that we must get the facts out -- it is for ourselves, America, for every free country in the world, and for civilization itself."
As for the two Israeli soldiers captured and held in Lebanon for prisoner exchange, we must keep a little history in mind. In the late 1990s, before Israel was evicted from southern Lebanon by Hezbollah, it was a common practice for Israel to abduct entirely innocent Lebanese. As a 1998 Amnesty International paper declared: "By Israel's own admission, Lebanese detainees are being held as 'bargaining chips'; they are not detained for their own actions but in exchange for Israeli soldiers missing in action or killed in Lebanon. Most have now spent 10 years in secret and isolated detention."
Israel has created its worst enemies -- they helped create Hamas as a counterweight to Fatah in Palestine, and their occupation of Lebanon created Hezbollah. The current terrible bombings can be expected to keep the process going. Since its very beginning, Israel has been almost continually occupied in fighting wars and taking other people's lands. Did not any better way ever occur to the idealistic Zionist pioneers? But while you and I get depressed by the horror and suffering, the neo-conservatives revel in it. They devour the flesh and drink the blood of the people of Afghanistan, of Iraq, of Palestine, of Lebanon, yet remain ravenous, and now call for Iran and Syria to be placed upon the feasting table. More than one of them has used the expression oderint dum metuant, a favorite phrase of Roman emperor Caligula, also used by Cicero -- "let them hate so long as they fear". Here is William Kristol, editor of the bible of neo-cons, "Weekly Standard", on Fox News Sunday, July 16: "Look, our coddling of Iran ... over the last six to nine months has emboldened them. I mean, is Iran behaving like a timid regime that's very worried about the U.S.? Or is Iran behaving recklessly and in a foolhardy way? ... Israel is fighting four of our five enemies in the Middle East, in a sense. Iran, Syria, sponsors of terror; Hezbollah and Hamas. ... This is an opportunity to begin to reverse the unfortunate direction of the last six to nine months and get the terrorists and the jihadists back on the defensive."
Host Juan Williams replied: "Well, it just seems to me that you want ... you just want war, war, war, and you want us in more war. You wanted us in Iraq. Now you want us in Iran. Now you want us to get into the Middle East ... you're saying, why doesn't the United States take this hard, unforgiving line? Well, the hard and unforgiving line has been [tried], we don't talk to anybody. We don't talk to Hamas. We don't talk to Hezbollah. We're not going to talk to Iran. Where has it gotten us, Bill?"
Kristol, looking somewhat taken aback, simply threw up his hands.
The Fox News audience does (very) occasionally get a hint of another way of looking at the world.
Iraq will follow Bush the rest of his life Here comes now our Glorious Leader, speaking last week at a news conference at the G8 summit in St. Petersburg, referring to Russian president Vladimir Putin. "I talked about my desire to promote institutional change in parts of the world like Iraq where there's a free press and free religion, and I told him that a lot of people in our country would hope that Russia would do the same thing."