Ashkenazi had been in the army until 2005 when the air force's Dani Halutz won the race for chief of general staff. Ashkenazi replaced his olive green fatigues with dark blue business suits and is now the Defense Ministry's director general. Last week Halutz resigned and in about a fortnight Ashkenazi is going to be lieutenant general.

"He is going to return the IDF (Israel Defense Forces) to its basic values," predicted retired Maj. Gen. Uri Saguy, who had been one of Ashkenazi's commanders.

Saguy put his finger on one of the basic problems that last summer's war in Lebanon exposed. The military developed a concept that did not work.

Analysts maintained the Arabs realized they cannot beat Israel in a conventional war, so such wars are over. Rockets, possibly carrying weapons of mass destruction, are the major threat. That, and guerrilla type warfare.

The military thought of "shaping (the enemy's) consciousness" and using "levers and effects." When it wanted to warn Syria not to back Hezbollah, is sent fighter planes over President Bashar Assad's home in Latakiya, in northern Syria. The message was: beware.

Such thinking also affected the way the war was run. The Ha'aretz newspaper Tuesday published excerpts from General Staff debates at that time.

Bint Jbail is a Muslim-Shiite southern Lebanese town where Hezbollah's leader Sheikh Hassan Nasrallah delivered a victory speech in May 2000 upon Israel's evacuation of southern Lebanon. Nasrallah described Israel as a flimsy spider web.

Shortly after Hezbollah sparked the summer's fighting by kidnapping two Israeli soldiers, the head of the Ground Forces Command Maj. Gen. Benny Gantz recommended Israel "take the place apart." It is a Muslim-Shiite town, he noted.

The Head of the Northern Command Maj. Gen. Udi Adam and Deputy Chief of General Staff Maj. Gen. Moshe Kaplinsky maintained there was no tactical military significance to occupying Bint Jbail. "It has a symbolic significance," Kaplinsky said.

The military honed the air force, Israel's strategic long range arm, and made strides in fighting the Palestinian militants. Since 2003 Israel has been foiling more and more planned suicide bombings. In 2003 it foiled 83 percent and last year 95.

Hezbollah's quiet buildup was relegated "to the fringes of the intelligence briefings," the chairman of the Knesset Foreign Affairs and Defense Committee, Zahi Hanegbi, told a Herzliya conference.

The new ideas and budget cuts led to closing tank units and curtailing training exercises. Commanders sat behind plasma screen directing small units in policing the occupied territories. They lacked experience in managing large formations.

The war was a wake-up call and one of the main lessons was to dump the "levers and effects strategy." Instead of trying to influence the enemy's consciousness, "you've got to lick the enemy with physical force," Hanegbi told United Press International. Arab belief that Hezbollah won the war, despite some 1,000 dead and extensive material damage, seemed to convince Israelis they do not understand the Arab mind.

Right after the war the army began drawing new plans and is now implementing some of them. It is rebuilding units that were dismantled and has stepped up training.

Brig. Gen. Udi Dekel, who heads the Strategic unit in GHQ's Planning Directorate, told the Herzliya conference the long term plans talk of four pillars.

One is to strengthen Israel's early warning capabilities from providing a strategic warning over Iran's nuclear capabilities to very specific warnings about an individual suicide bomber. It will seek more intelligence in order to launch pin-point attacks, for example on Hezbollah's hidden rockets. Hezbollah had concealed some of them so well that soldiers found them only when stepping on them, a military source said.

The second goal is to strengthen deterrence by demonstrating readiness to use the force. Fewer 'effects' and more coping with threats in order to neutralize them, Dekel said.

If deterrence fails, the army should lick the enemy using also ground forces, combining movement and accurate fire. The air force failed to stop the short range rocket attacks. The soldiers on the ground did. During the Lebanon war the army was reluctant to order divisional attacks and when it did so, it was too late because a cease-fire went into effect. The army will also have to develop capabilities to fight in civilian populated areas since guerrillas hide there, Dekel said. That was the third leg of the new plan.

The fourth element will focus on active defense against rocket attacks. Israel tended to ignore the short range rockets' potential. It did not stop Hezbollah from deploying more than 10,000 rockets in southern Lebanon.

The war proved that a steady attack on civilian targets, even with crude missiles, has a strategic effect. Most of northern Israel was paralyzed during the war as 40 civilians were killed and some 2,400 were wounded.

"We need a capability to intercept rockets," said Dekel. The cost of intercepting a Scud was 10 times the price of the Scud itself and knocking out short range rockets will require an even bigger investment, he said.

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