His comments came less than 24 hours after he initiated a 48-hour suspension of aerial activity in southern Lebanon, following Sunday's attack in Kafr Kana.
The ground thrust is expected to be the final act of the three-week war before the United Nations Security Council approves a cease-fire, expected by the end of the week. The security cabinet was still meeting close to midnight Monday.
US Secretary of State Condoleezza Rice, in remarks made before leaving Jerusalem for Washington on Monday, said she believed the path has been paved "for the United Nations Security Council to act on both an urgent and comprehensive basis this week."
Rice is working on an agreement that will be brought to the Security Council that would include a cease-fire, the creation of a multinational force that would take up positions in the south and along the Lebanese-Syrian border, and implementation of previous Security Council resolutions calling for the disarmament of Hizbullah and the extension of Lebanese sovereignty throughout the country.
Senior diplomatic officials in Jerusalem said that Israel's decision to suspend the aerial activity, and to allow for a 24-hour period of safe passage for all residents of south Lebanon who wish to leave, was made to help the Americans get the cease-fire package through the United Nations.
"The idea was that this would help calm things down," the source said, adding that the idea was Israel's initiative, and that Jerusalem was not pressed by the US to take this step.
Channel 2 said that the idea came from Vice Prime Minister Shimon Peres, currently in the US. Peres was prime minister in 1996 when the errant shell on Kafr Kana which killed more than 100 people effectively put an end to Operation Grapes of Wrath.
Foreign Ministry officials said that the decision to suspend aerial activity in south Lebanon had taken some of the edge off of criticism being leveled against Israel in capitals around the world, and that it had made things "easier" for Israeli diplomats arguing the country's case on Monday.
The European Union's foreign ministers are scheduled to hold an emergency meeting in Brussels on the situation in Lebanon on Tuesday.
Olmert, during his speech, said that "For the first time, conditions have been created to begin implementation of UN Resolution 1559, which calls for the disarming of Hizbullah, its expulsion from the border and the deployment of the Lebanese army along the border."
He termed this a "one-time opportunity to change the rules of the game in Lebanon."
Nevertheless, Olmert - apparently trying to change a perception inside Israel that the 48-hour aerial suspension meant Israel was stepping down its campaign in Lebanon - said during his speech that Israel's military actions would continue.
"The fighting continues," Olmert said. "There is no cease-fire and there will be no cease-fire. The IDF is fighting in the air, sea and land, and at this very moment, the IDF is advancing in the south of Lebanon to destroy the terrorist infrastructures there."
Answering critics claiming that the IDF had little to show for three weeks of warfare, Olmert said that the achievements had been substantial, and that "Hizbullah does not look today as it did 20 days ago - threatening, arrogant and dangerous." Olmert said that the organization suffered a major blow that would take a long time - "if ever" - to recuperate from.
"We expelled Hizbullah from its positions along the border with Israel and removed this immediate threat. Never again will we agree that Hizbullah return to these posts and continue to threaten to kidnap soldiers or directly fire at our northern communities," he said.
Olmert also said that Israel damaged Hizbullah's long-range missile capabilities deep inside Lebanon, and would continue to do so. "We destroyed Hizbullah command and control systems, as well as its headquarters, and damaged its infrastructures. Hizbullah military bases and compounds in Beirut, Baalbek and other places no longer look the same," he said.
Regarding Katyusha fire which continue to rain down on the North, although Monday only a handful of the rockets were fired, Olmert said that Israel damaged the array of Katyushas in south Lebanon.
He also said that Israel had located and damaged the transfer of arms from Syria to Hizbullah, adding: "We will no longer tolerate the transfer of weapons to Hizbullah and we will not allow the organization to regain its capabilities."
He said Hizbullah's leadership was in hiding, and that Israel would continue to pursue them. "It is a leadership under pressure, engaged in a web of lies and manipulations designed to conceal the true reality," he said.
Olmert's impassioned speech, in which he made reference to the IDF soldiers killed in last week's battles, especially to Roi Klein, the deputy commander of the Golani Brigade's 51st battalion who recited the "Shema Yisrael" prayer after throwing himself on a grenade to save other soldiers, came some 24 hours after a State Department spokesman traveling with Rice announced the aerial suspension after midnight Sunday night.
Officials in Olmert's office denied that Defense Minister Amir Peretz and Foreign Minister Tzipi Livni were not consulted about the decisions, saying that Livni informed Rice of the move at about 10.30 p.m., and Peretz made a few changes to the wording of the announcement to temporarily stop the aerial activities.
The announcement said that Israel would continue to reserve the right to take action against targets preparing attacks against it, and that it would continue to provide air cover for ground operations.
Officials in the Prime Minister's Office said that aerial actions did continue throughout the day, and that the IAF would be able to continue its bombardment of targets in southern Lebanon when the suspension ends early Wednesday morning.
Olmert stressed during his speech that Israel had no fight with the Lebanese people, and urged them to hold Hizbullah's Hassan Nasrallah, not Israel, responsible for their plight.
Nasrallah, he said, was ready to sacrifice the lives of many Lebanese to serve the interests of Syria and Iran.
In a related development, Iranian Foreign Minister Manouchehr Mottaki arrived in Lebanon Monday for talks on the war. In addition to meeting Lebanese officials, he was also expected to meet visiting French Foreign Minister Philippe Douste-Blazy, who said on Monday that Iran played a stabilizing role in the region.
