Leading article: An exchange that clears the way for a new beginning

The macabre exchange that took place yesterday on the border between Israel and Lebanon is being widely presented as the final chapter in the ill-fated war of two years ago. And in many ways it is. Short, sharp and brutal, that war was Israel's ill-judged response to the capture of two of its soldiers by forces of the Shia group, Hezbollah. Now, those two soldiers – emblems since then of Israel's abiding sense of insecurity – have been returned to their homeland, in coffins. Their families can give them the religious burial their faith requires. The circle of retribution has been closed.

Some might also see in yesterday's solemn ceremony a symmetry that was not inappropriate. The prisoner exchange looked as unbalanced as the war itself, which cost the lives of 157 Israelis and more than 1,200 Lebanese. In return for the bodies of its two student conscripts, Israel handed over five Hezbollah prisoners, alive, and the remains of 200 Hezbollah fighters. The agreement was fiercely contested in Israel, and could yet weaken still further the position of the already beleaguered Prime Minister.

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Yet crude body counts are deceptive. Israel has always set an exceptionally high value on its captured citizens, which is a reason why Israeli prisoners are so prized as bargaining chips by its adversaries. It was in a vain attempt to halt once and for all the cross-border raids by Hezbollah from southern Lebanon that the Israeli government took the decision to fight.

Nor, in its outcome, was the war as one-sided as the casualty figures suggest. That Israel used this pretext to launch a full-scale war on Hezbollah, the degree of force it used, and especially its pursuit of hostilities even after the ceasefire had been declared, left its international reputation in shreds. Even staunch allies declined to mince their words.

And while the security of northern Israel was improved by the insertion of a new, EU-backed, peace-keeping force in southern Lebanon, Hezbollah's appeal as the leading force of resistance to Israel has also been enhanced – as it has demonstrated from time to time. Arguably, the relief afforded to northern Israel by the enforcement of the demilitarised zone had the unintended consequence of destabilising Lebanon itself. The spectre of civil war returned.

It was inside Israel, however, that the Lebanon war may have had the greatest lasting impact. A war declared in haste, without – as is now known – the wholehearted support of the top brass, became that rare thing: an Israeli military enterprise that failed to achieve its declared objective. Israel could not secure the release of its captives, and its invasion ended in an unproductive retreat.

The war thus demolished the myth of Israel's military invincibility, not just in the region, but at home. It removed many of the arguments for the special place of the military in Israeli life, and precipitated soul-searching at every level of Israeli society. The report of the Winograd Commission, published earlier this year, marked the end of an era in which Israel believed it could rely on military prowess for its security. In truth, though, that process had begun earlier, as a generation reached adulthood with no memory of a time when their country's very existence was at stake.

Had this shift not coincided with the split in the Palestinian Authority and a further weakening of Ehud Olmert's position over corruption allegations, there might have been more progress towards Middle East peace than there has. Even so, recent months have seen tentative advances. Yesterday's prisoner exchange not only ends a lamentable chapter, but could – we hope – mark the beginning of something new and better.