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Let’s do a little thought experiment here. Say that everything happened exactly as before except this time they retreated and hid inside Israeli hospitals and schools, on the Israeli side of the border, full of Israeli citizens. Do you think Israel would attack those terrorists in the same way?
Probably not, because those would be THEIR hospitals. There would be no tunnel system, no munitions stores, etc etc.
Your “gotcha” thought experiment is asking whether or not a country should treat the enemy country with equal caution to their own. Did you even consider it before asking it?