Israel is in a fight for its life. It has been trying to get Lebanon to remove Hezbollah and its thousands of rockets from its border for years. Hezbollah has spent the last six years attacking Israel, building bunkers in civilian areas, bringing more Iranian rockets into Lebanon from Syria, and preparing to attack Israel.
There is a pretty good argument that Israel has been too soft, both in not striking sooner and in telegraphing its bombing targets by dropping leaflets to warn Lebanese civilians. (You wonder how all that damage you see on the news could have resulted in only 400 Lebanese deaths? I don't mean to trivialize the hardship to the Lebanese, but Israelis have died because the Israeli military is trying to limit Lebanese casualties.)
Iran is trying to build nuclear bombs, and at the moment the front line is in Israel and Lebanon. If the Israelis and Palestinians signed a peace accord tomorrow, it wouldn't make one whit of difference to Hezbollah, Iran, Syria, and their regional aspirations. In the west, we are all benefiting from what Israel is doing. When/if Iran gets nuclear bombs, it won't just be Tel Aviv that's a smoking rubble.