War is the continuation of politics, and it's quite likely that this is precisely the intended outcome Hamas is banking on. Assumptions that Hamas are going to experience strategic surprise by Israel counterattacking (and killing lots of civilians) are questionable to my mind.
Politics is the highest level of human activity: the Americans like to remind the Vietnamese that that they won every real battle in the Vietnam war. The Vietnamese like to remind the Americans that it didn't actually matter. Both sides are correct, but only one side won.
There were 20 million Afghans when the US invaded Afghanistan. There were 40 million Afghans when the US left. The strategic calculus for the Palestinian people is going to involve ruthlessly trading a lot of lives for political gains, and that certainly includes children.
The constraint that Israel faces is that it *clearly* doesn't think it can really stage some sort of forceful ethnic cleansing of 2+ million Palestinians without suffering very serious negative consequences. People saying "just cleanse the Palestinians bro!" aren't being serious.
By comparison, the ethnic cleansing taking place against Armenians involve some 100.000 Armenians. 5% of the population of the Gaza strip, in other words. And there is a natural place for them to go: the Armenian nation-state.

Forcing the Palestinians into Egypt isn't as simple.
Does Egypt, with its own troubles, with food prices spiking, want to accept several million Palestinians? But what about Lebanon? Don't they just want to pay for them? Or how about Hungary or Poland? Surely just dumping millions of people on other countries isn't *that* bad?
Sadly, it really is "that bad". Particularly right now, in this economy. Pretending like a mass expulsion of *millions* of people is something a state can just dump on its neighbors without any second-order diplomatic consequences is just very foolish.
Moreover, humans are actually built to live under conditions of short (by modern standards) lifespans, uncertain futures, and extreme levels of human-on-human violence. That is the factory setting of humanity, as detailed in this nifty book:

amazon.com/War-Before-Civ…
What this means is that a strategy of "mowing the lawn", "culling the grass" or any other euphemism for depriving Palestinians until they break and run away isn't likely to work. This has been the de-facto strategy of Israel, though: hoping that misery will get people to leave.
These attacks are a pretty good signal that the Israeli status quo strategy just isn't going to work. And again, merely increasing the pressure - killing more people through bombing - just further activates that basic human "factory setting". It's not a solution either.
Israeli society isn't going to be able to tolerate attacks like this without experiencing massive instability. But again, mass ethnic cleansing isn't actually "one weird trick" without messy second- and third order effects. The dilemma here is thus quite real.
There's two big problems for Israel in the medium term.

One: a volatile internal demographic crisis (not primarily jews versus non-jews, but haredim versus non-haredim) which recently paralyzed the country and triggered these massive, fairly unprecedented demonstrations.
Two: a shifting alliance network in the Middle East. I'm reminded a bit of the game of musical chairs in Europe during the latter half of the 19th century, with Germany being the big bugbear and France at risk of the very scary prospect of near-total diplomatic isolation.
If you think about this conflict in terms of states and their interests, the "win condition" in the medium term for Israel consists of 1) settling the Palestinian question according to its own preferences, 2) achieving some sort of stable position in terms of foreign relations.
In the good old days of US primacy, ethnically cleansing millions of Palestinians was at least theoretically achievable under point 1) without risking point 2). If the major regional players were divided, and the US had primacy, time could potentially have healed all wounds.
Today, it's an open question among many or maybe even most serious actors inside the Israeli state whether the US can actually be relied on to be on hand even 10 years from now. And if you're watching Ukraine play out, the answer is probably leaning toward a "no".
For Palestine, the "win condition" consists of upending the Israeli status quo, which in turn means frustrating Israel's attainment of goals 1) and 2) above. If Israel has to come to a negotiated settlement on the Palestinian question to achieve external stability, that's a win.
Right now, abandoning the status quo in any direction is more or less politically impossible inside Israel. But what is "possible" in politics can change remarkably quickly. France in 1890 was a republic, Russia an absolutist monarchy. Still, they managed to form an alliance.
Moreover, "the samson option" and the possession of nuclear weapons doesn't actually help Israel in particularly relevant ways. Israel's goal can't just be state survival, it has to be *stability*, and here nukes are worse than useless.
If Israel is under mortar threat, if random militants just kidnap Israeli settlers, you can't just declare that you'll nuke Beirut and Riyadh until the kidnappings stop. Nuclear weapons are good defensively against state actors. They are not good instruments of external coercion.
The only reasonable response for neighboring states if Israel tries to intimate that it will start relying on "the samson option" as a solution to low-level attacks on Israeli settlers is acquiring WMDs of their own. At which point nukes truly become irrelevant as a solution.
All of this is to say that this latest military action by Hamas - like *all* military action - only really finds meaning within the context of a political calculus. And in the realm of the political, it's far from a settled issue which side will eventually win the conflict.
The Palestinians might have to eat a quarter million dead and wounded before they can shift the calculus enough that accepting some sort of viable two-state solution becomes the least bad option in Israel. But that's far from an impossible ask, given actual human nature.
And in the end, Israel engaging in full-scale ethnic cleansing might end up being the Palestinians playing the part of Samson in order to bring down the Philistines: the end result of such a course might be to make Israel's long-term position in the region completely unviable.
If you actually have to be responsible for the survival of your own state and your own people, it's that fear that should keep you up at night. To say that Israelis would blithely take such risks is worse than calling them evil: it's calling them stupid.

They're not stupid.

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