Israel has made its point: they are willing to defend their borders most vigorously. Whether you agree with the Israeli military actions or not, surely they have reminded their neighbors what compulsory military service, American-made weapons, and $9 billion in spending buys you.
What's left to be gained by deeper incursions? Lebanon has made a offer to displace militants with national military forces. I strongly doubt such a scheme would work. But what does Israel have to lose?
The worst possible result is a temporary return to the status quo ante. Assume the most likely result: Lebanon is unable to effectively police their border and international forces aren't available to provide security. Hezbollah guerrillas strike at Israel either through rocket attacks or by crossing the border again. Israel then has to decide whether to resume military strikes against south Lebanon, with one major difference. Israel would have won wider support from the international community because Hezbollah once again breached the peace. The Lebanese government will have proved themselves unable to secure the border, leaving Israel no choice but to resume a vigorous military campaign.
The other potential negative for Israel is the opportunity Hezbollah would have to regroup. Were Hezbollah a regular army, this would be a significant concern. Hezbollah is not a regular army and does not need -- or benefit greatly from -- a substantial infrastructure.
In sum, if Israel accepts the peace offer, they turn perception on the world stage. They give Lebanon a chance to secure the border. If Lebanon fails, Israel has the duty and right to resume attacks and take control of southern Lebanon. If, unlikely as it might be, Lebanon succeeds in controlling its own border, Israel has won the best possible outcome for the current crisis.