Switzerland has criticised Israel's attacks in Lebanon as "disproportionate", while at the same time condemning Islamic militant aggression.
Arnold Hottinger, a Swiss expert on Middle East affairs, tells swissinfo that the violence is unlikely to end soon, and says the international community is partly to blame for failing to recognise Hamas as the democratically elected government of the Palestinian territories.
On Thursday Israeli troops and aircraft pounded targets in southern Lebanon for a second day in response to a cross-border raid by Hezbollah guerrillas in which two Israeli soldiers were captured and eight others killed.
A reported two rockets were later fired on the Israeli city of Haifa, however Hezbollah denied it was responsible.
The violence in Lebanon coincides with a major Israeli offensive into the Gaza Strip to retrieve another captured soldier and to halt Palestinian rocket fire.
Palestinian President Mahmoud Abbas said on Thursday that Israel's incursion into Lebanon had raised the threat of a large-scale Middle East war and urged world powers to intervene "to stop this serious deterioration".
The United Nations Security Council has set an urgent meeting on the Lebanon situation for Friday.
On Thursday the Swiss foreign ministry issued a statement condemning Israel's actions as "disproportionate".
"Even if the aggression by Hezbollah on the Israeli border can be condemned, Israel's reply should remain strictly proportional and not threaten a non-hostile neighbouring state," it said.
The ministry added it welcomed the Lebanese government's actions to try and find a solution to the crisis and called on all parties to end the "destructive escalation" which threatened to turn into a regional conflict with potentially devastating effects on the local population.
For its part, the Swiss-run International Committee of the Red Cross (ICRC) reminded Israel to ensure that the basic needs of the 1.4 million residents of Gaza were met. It also called on those detaining the Israeli soldier captured last month to treat him humanely.
swissinfo: In view of the rising death toll over the past couple of days, would it be fair to say that we're heading towards a new period of bloody conflict in the region?
Arnold Hottinger: It depends very much on the Israelis, whether they will want to reactivate the Lebanese front or whether they will content themselves with a few blows and leave it at that.
swissinfo: But Israeli Prime Minister Ehud Olmert appears to be under pressure to strike hard against both Hamas and Hezbollah?
A.H. Certainly. He has the army standing right behind him, and it's difficult to tell the army [to hold back] when it has suffered an enormous loss of prestige over the captured soldiers. I'm sure Olmert is under pressure from the army to do the maximum, but he must think of the political consequences.
swissinfo: Is the capture of the three Israeli soldiers likely to bring the Israelis to the negotiating table?
A.H.: No, but there will be a new wave of hope among the Palestinians that they can achieve something. They can see that the capture of the soldiers has had a deep effect on the Israelis.
But the Palestinians are misreading the situation. In fact the Israelis and Palestinians both misread each other. The Israelis think that if they only beat them enough, the Palestinians will give in – and that's not true.
swissinfo: The Palestinian president, Mahmoud Abbas, has appealed for intervention. What room is there for diplomacy now?
A.H.: It's too late. First of all the Americans will always take the Israeli side, and right now the Palestinians are convinced that the Americans are no real partner. Second, the Europeans have no clear position what they want to do – and they have no force to impose anything anyway.
So the fighting will go on. Both sides will insist on misreading the other and that will lead to a continuation and a slow increase of the crisis until they understand that they both have the wrong approach.
swissinfo: Did the failure of the international community to recognise a democratically elected Hamas give Israel a green light to go after them?
A.H.: It did certainly encourage Israel that nobody recognised Hamas, but it also forced Hamas into activism. If Hamas saw the possibility of a diplomatic way out, they would take it.
swissinfo: So it was a serious error of judgment by the international community not to recognise what is a democratically elected government?
A.H.: Too much was made of the word "terrorism". People were saying, "they are terrorists, so we don't talk to them". They were terrorists and they were trying something else. We didn't talk to them, so they remained terrorists.
swissinfo: Are we seeing the birth of a third intifada and the prospect of a new wave of suicide bombings in Israel?
A.H.: No. It won't be an intifada, because the [Palestinian] masses are too tired. It will be a guerrilla action like in Iraq.
swissinfo-interview: Adam Beaumont
Switzerland was one of the few western governments to recognise the Hamas-led Palestinian government after the parliamentary elections in January this year.
The foreign ministry said Switzerland was ready to work together with the new Palestinian government, provided its action was based on dialogue and peaceful methods.
It added that the Palestinian Authority should adhere to its obligations contained within the Oslo Accords, in particular recognising the state of Israel and the two-state solution.
Swiss involvement in Israel and the occupied territories primarily consists of development aid for the Palestinians.
This is routed through non-governmental and other international organisations. No direct funding is given to the Palestinian Authority, apart from a subsidy to the statistical office.
Earlier this month Switzerland, which is the depositary of the Geneva Conventions, urged Israel to respect international humanitarian law during efforts to liberate the soldier captured in Gaza.
In compliance with the JTI standards