Figures released by the Israeli army show the pace of Hezbollah rockets raining down on Israel has not slowed — and the terrorists are nowhere close to being neutralized.

Air power alone is proving insufficient to rout Hezbollah, whose determination and intimate knowledge of the terrain are making them a tougher-than-expected foe.

Mideast observers say Hezbollah only has to remain standing — not beat Israel — to emerge victorious in Arab eyes.

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Hezbollah actions such as blowing up an Israeli warship with an Iranian-made radar-guided missile or firing rockets at the once out-of-range city of Haifa have shattered taboos and astounded Israel and the world.

The group has built Viet Cong-style bunkers and tunnels near the Israeli border to shelter weapons and fighters, and its members easily blend in among civilians.

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"You are dealing with groups of 10 to 12 very well organized, very well trained people who work out of their homes," said Timur Goksel, a university professor who spent more than two decades as a senior U.N. adviser in south Lebanon. "Don't underestimate the resilience of these people."

Israel's army chief of staff claimed on Friday that nearly 100 guerrillas had been killed in fighting that broke out on July 12 when Hezbollah crossed into Israel and captured two Israeli soldiers. But military officials have privately lamented what they called the low number of Hezbollah casualties. Hezbollah itself admits to only 11 dead.

Fearing a prolonged quagmire and heavy casualties among its troops, Israel says it has no intention of launching a massive land invasion to defeat Hezbollah. But the past several days' small-scale pinpoint operations to root out guerrilla positions along the border are also proving far more daunting than expected, according to soldiers returning from battle.

The troops complain of difficult terrain and being surprised by Hezbollah terrorists who pop out from behind bushes firing automatic weapons or rocket propelled grenades. Ten Israeli soldiers were wounded on Monday as they tried to take the southern Lebanese town of Bint Jbail amid a heavy exchange of gunfire, missiles and mortars.

The pinpoint incursions are supposed to accomplish what the 4,000 Israeli air sorties conducted in the 13-day conflict have been unable to achieve. But the twin strategy of air strikes and limited ground offensives will not be enough "to force Hezbollah to refrain from launching attacks," said Israeli counter terrorism expert Boaz Ganor.

The issue is fraught with dilemmas for the Jewish state.

Israel is determined not to reoccupy south Lebanon as it did disastrously from 1982 to 2000, but that may be the only way to neutralize Hezbollah.

Israel might want to use a cease-fire to achieve its strategic goals. But a cease-fire that leaves Hezbollah's fighting ability intact could, in the eyes of many Israelis, cause irreparable damage to Israel's deterrent posture and hand a major victory to archenemy Iran, Hezbollah's prime supporter.

Israeli Cabinet minister Avi Dichter insisted the army's offensive is going fine and that Israel can't be expected to achieve its military objectives overnight, especially given what he said was the government's determination to limit casualties among civilians and Israeli soldiers.

"We know that only in Hollywood it starts at 8 and ends at 10 and normally it's a happy end," he said.

Israel says it has already taken out nearly half of the estimated 10,000 to 12,000 Hezbollah rockets in south Lebanon, and that its blockade of the country should help keep the guerrillas from restocking.

But Israeli army figures show that there's been no letup in the number of rockets Hezbollah has fired at Israel. Since fighting erupted, the count stands at more than 1,100, with the number more or less evenly divided over the past 12 days. At least 80 hit Israel on Monday, and two days ago the number was 129.

Most of Hezbollah's rockets have been Iranian-made Katyushas and Syrian made Raads, with ranges of 25 to 28 miles. Israel also believes Hezbollah possesses the Iranian-made "Zalzal" rocket, which has the range to hit Tel Aviv and cities even further south.

"Certainly Hezbollah doesn't seem to have suffered many casualties and I don't think their military capability has been degraded," Goksel said.

At least 384 people have been killed in Lebanon since the fighting began, according to security officials. More than 600,000 people have fled their homes in the tiny Mediterranean country.

Israel's death toll stands at 36, with 17 people killed by Hezbollah rockets and 19 soldiers killed in the fighting.

If Hezbollah emerges from the fighting with its "military arm more or less intact ... my God they're going to use it as a victory," Goksel said.

"As long as they don't lose they don't have to win ... because they'll be standing up to the Israelis and in this part of the world that is a victory."

Complete coverage of the Mideast Meltdown is available in FOXNews.com's Mideast Center.