The deal is done. Israel has agreed to exchange live Arab prisoners for dead Israeli soldiers. Walking, talking, alive and breathing, tried and convicted terrorists and 190 dead terrorists for the corpses of kidnapped Israeli soldiers.

In politics, much like in big business, decisions do not always follow the classic game theory model. Win-win, win-lose and even lose-lose do not always apply. Sometimes, decisions are made only in order to cut future losses and move on. Israel is cutting losses, Israel is moving on. Israel has nothing more to gain in this go-round with Hezbollah and nothing more to lose.

Bad decisions were made from the beginning and those bad decisions will live on, setting a bad precedent. When the War with Lebanon began two summers ago, the intention was to find Ehud Goldwasser and Eldad Regev and bring them home - dead or alive, to return Israeli soldiers to Israeli soil. Along the way Israel lost sight of the original goal. Instead of fighting to find the boys, Israel fought to debilitate Hezbollah. By the time a cease fire was called, neither goal had been achieved.

There have been other deals between Israel and Hezbollah and none of them have been good - but neither have they significantly hurt Israel. This deal, which includes exchanging notorious terrorist Samir Kuntar, will number among one of the worst deals the State of Israel has ever cut with the enemy.

The reasoning for accepting the deal goes like this. The parents of Goldwasser and Regev, their immediate family, need closure. Their extended family, which has grown to include the entire country of Israel, needs closure. The Prime Minister's Office in Jerusalem has said that Hezbollah has no more information to give about Israeli navigator Ron Arad who was shot down, taken hostage and abandoned on enemy soil twent-two years ago. If Hezbollah has no more information to give, then Kuntar has little currency. Politically Kuntar is now dead weight.

The best use of Kuntar right now is to sacrifice him for the remains of the Israelis, to stave off the possibility of Goldwasser and Regev turning into Arad - disappeared into a black enemy hole with no one claiming knowledge or possession. By retrieving the bodies Israel will be denying her enemies the pleasure of gloating over a prized possession - the bodies of two Israeli soldiers.

Kidnappings take a tremendous toll on a tiny, tightly knit, nation like Israel, a place where there are very few degrees of separation between families and the masses. In Israel almost everyone serves and that means that almost everyone's child is put at risk.

Israelis loan their children to the army, defending Israel against enemies is an unfortunate but totally understood reality. Israel receives those children with a special promise - to protect them, to make certain they do not die in vain. And if a parent is called upon to make the ultimate sacrifice for home and country, if an Israeli soldier is killed, Israel has always promised to bring back the body and erect a proper grave.

The Israeli army mantra, the Israeli army code, of "no body left behind in the battlefield" is not only meant to soothe soldiers and their families. It is also meant to tell the enemies of Israel that they will be denied the perverse thrill of publicly mutilating the bodies and then exchanging the corpses for live terrorists.

The ramifications of this deal are significant. The bodies will be returned, graves will be erected, but a gaping hole will have been placed in the Israeli justice system because of this prisoner exchange. The Arab terrorists in this exchange were tried and convicted by the Israeli court. Kuntar was sentenced to four life sentences without the possibility of parole for his brutal acts. Israel does not have capital punishment, this judgment was the toughest sentence the court could give.

Now the message is being transmitted to all terrorists - those already convicted and those still planning their acts - that there is always a way to get out, there is always the possibility of exchange. The message to the terrorists is that there is always a way to get out. Just kidnap Israelis and hold them for ransom.

And then there is the blow to the victims, the people injured by the terrorists now being released, the families of the people whom they killed and the people injured and killed in the capture of these terrorists. All Israelis understand the risk of living in Israel. All Israelis understand the dangers of terror and the reality of army service. These citizens of Israel relied on the State for justice. Now the brutal murderers will be set free because the State is cutting political and military losses.

There are some in Israel who think that this exchange does more than cut losses, they think that it hurts Israel militarily. They think that it signals a death sentence for Gilad Shalit, another hostage, another kidnapped Israeli soldier who is being held in Gaza by a Hamas-related group. They think that the enemy will now believe that if you can get so much for a dead soldier, why go through the trouble of keeping Shalit alive? The answer to that is, strange as it sounds, Hamas is not Hezbollah. Each enemy group, each terrorist organization, each country at war with Israel plays by their own set of rules much as Israel deals differently and independently with each of them.

There are those in the intelligence and the defense world who say never exchange live prisoners for dead soldiers. Live for live, dead for dead, no exceptions or you lose the advantage in negotiations. That thinking has merit. But today's politicians have acted differently and right now, in this exchange, it is too late to implement that policy.

This will not be the last negotiation because this will not be the last kidnapping. Terrorists are rehearsing. They have training films and propaganda reels. Recruits are learning how to grab the Israelis and how to carry them away.