This was a distortion. When the smoke blew away there was one casualty, not 40.

http://www.hindu.com/2006/08/08/stories/2006080808461200.htm
Addressing Arab Foreign Ministers in Beirut on Monday morning, Lebanon's Prime Minister Fuad Saniora said an Israeli attack had killed 40 persons in Houla. "An hour ago, there was a horrific massacre in the village of Houla in which more than 40 martyrs were victims of deliberate bombing," he said.

Interrupting his remarks several times to fight back tears and to wipe his eyes, Mr. Saniora accused Israel of indulging in "State terrorism". "If these horrific actions are not State terrorism then what is State terrorism?" He said Israeli strikes had taken "our country back decades. We are still in the middle of the shock."

Corroborating Mr. Saniora's assertion, local Lebanese television stations had reported that about 40 persons had been buried under the rubble of houses that had collapsed on being hit during Israeli air strikes. The Israel army said it was investigating the allegation, but added that it had warned residents in Lebanon's southern villages to leave.