In a TV interview in Beirut Sunday, Nasrallah admitted second thoughts about the wisdom of capturing the two Israeli soldiers, an incident that triggered the war: "The party leadership never expected a response on such an unprecedented scale and volume [by Israel]," he said. "Had we known that what we did would lead to this, we would certainly not have embarked upon it."
For a roundabout way of eating humble pie, this was not bad for a man whom Western media have portrayed as the latest Arab folk hero or even (as one U.S. weekly put it) a new Saladin.
Why did Nasrallah decide to change his unqualified claim of victory into an indirect admission of defeat? Two reasons.
The first consists of facts on the ground: Hezbollah lost some 500 of its fighters, almost a quarter of its elite fighting force. Their families are now hounding Nasrallah to provide an explanation for "miscalculations" that led to their death.
Throughout southern Lebanon, once a stronghold of Hezbollah, pictures of the "martyrs" adorn many homes and shops, revealing the fact that many more Hezbollah fighters died than the 110 claimed by Nasrallah. What angers the families of the "martyrs" is that Hezbollah fighters had not been told that the sheik was starting a war to please his masters in Tehran, and that they should prepare for it.
The fighters found out there was a war only after the Israelis started raining fire on southern Lebanon. In fact, no one - apart from the sheik's Iranian contacts and a handful of Hezbollah security officials linked to Tehran and Damascus - knew that Nasrallah was provoking a war. Even the two Hezbollah ministers in the Lebanese government weren't consulted, nor the 12 Hezbollah members of the Lebanese National Assembly. The party's chief policymaking organ, the Shura (consultative assembly), hasn't held a full session since 2001.
The "new Saladin" has also lost most of his medium-range missiles without inflicting any serious damage on Israel. Almost all of Hezbollah's missile launching pads (often placed in mosques, schools and residential buildings) south of the Litani River have been dismantled.
Worse still, the Israelis captured an unknown number of Hezbollah fighters and political officers, including several local leaders in the Bekaa Valley, Khyam and Tyre.
The second reason why Nasrallah has had to backtrack on his victory claims is the failure of his propaganda machine to hoodwink the Lebanese. He is coming under growing criticism from every part of the political spectrum, including the Hezbollah itself.
Last week he hurriedly cancelled a series of victory marches planned for Beirut's Shiite suburbs after leading Shiite figures attacked the move as "unmerited and indecent." Instead, every village and every town is holding typical Shiite mourning ceremonies, known as tarhym (seeking mercy), for the dead.
Nasrallah has tried to rally his base by distributing vast sums of Iranian money through his network - by the end of last week, an estimated $12 million in crisp U.S. banknotes. But if Nasrallah had hoped to buy silence, if not acquiescence, he is being proved wrong. Some Lebanese Shiites are scandalized that they are treated by Iranian mullahs as mercenaries, and see Nasrallah's cash handouts as diyah (blood money) for their dead. And a dead man whose family receives a diyah cannot claim the status of "martyr" and enjoy its prerogatives in paradise.
As the scale of the destruction in the Shiite south becomes more clear, the pro-Hezbollah euphoria (much of it created by Western media and beamed back to Lebanon through satellite TV) is evaporating. Reality is beginning to reassert its rights.
And that could be good news for Lebanon as a nation. It is unlikely that Hezbollah will ever regain the position it has lost. The Lebanese from all sides of the political spectrum are united in their determination not to allow any armed group to continue acting as a state within the state.
The decent thing to do for Nasrallah would be to resign and allow his party to pick a new leader, distance itself from Iran and Syria, merge its militia into the Lebanese army and become part of the nation's political mainstream.
In last year's elections, Hezbollah ended up with 12 seats in the 128-seat National Assembly, thanks to a series of alliances with other Shiite groups as well as Christian and Druze parties. As the scale of Nasrallah's blunder becomes clearer, it is unlikely that Hezbollah would be able to forge such alliances in the future.
To be sure, Nasrallah remains a powerful man. He has hundreds of gunmen at his disposal plus a source of endless supplies of money and arms in Iran. He can still have his political opponents murdered inside and outside Lebanon either by his goons or by hit men from Damascus and Tehran. But his chances of seizing power through a coup de force or provoking a civil war are diminishing by the day.
Arab leaders never resign, even when they admit having made tragic mistakes. And Nasrallah is no exception. In reality, however, Lebanon has already moved into the post-Nasrallah era. And that is the only good news to come out of the mini-war he provoked.
Amir Taheri is a member of Benador Associates.