I think it very telling that Israel was told several times that it was shelling a UN observer post - and eventually, after such warnings, it destroyed it with a guided missile.

Ron's short statement above is exactly right.

And to go one further, the Hezbollah kidnap of the Israeli sources was precisely limited to a military target.

The Israeli response has been largely against Lebanese who are not Hezbollah, and against civilian not military targets. That, truly, is terrorism.