Israel has every right to defend itself against rocket attacks from Gaza. But the Israeli government should be careful that its response does not harm its own security rather than help.
Specifically, if Israel sends troops into Gaza in a repeat of the 2008 Operation Cast Lead the security costs to Israel are likely to outweigh the benefits. The regional context in 2012, in the wake of the Arab Spring, is far different than it was in 2008. Back then, Egyptian president Hosni Mubarak gave tacit and open support to the Israeli operation, and also kept the Rafah exit from Gaza into Egypt closed.
Mubarak is gone. The current Egyptian president, Mohammed Morsi, desperately wants to keep the regional peace and maintain Egypt's peace treaty with Israel; so far he has kept Cairo calm, despite multiple Israeli airstrikes on Gaza (which appear to be far more carefully targeted than in 2008).
But in the new Egypt, Morsi is an elected leader, who has to consider public reactions. If Israel invades Gaza with large scale civilian casualties, and pictures of dying women and children, he will be under pressure from an enraged public, and from members of his own party. Street protests could mount.
Even as I write, Turkey's prime minister, Recep Tayyif Erdogan is arriving in Egypt, where he will probably take a strong public stance, alongside Morsi, against any Israeli invasion. Israel's relationship with Turkey fell apart over the last Gaza invasion, and its cold, but crucial relationship with Egypt could crash over a similar invasion now.
Similarly, Jordan's King Hussein, already under fire over the lifting of subsidies, will be under heavy public pressure to react to a ground incursion. And Syrian President Bashar al Assad, who kept the Golan Front calm during Israel's 2008 invasion of Gaza, may now choose to deflect attention from Syria's ongoing civil war by heating up the border with Israel.
As if this was not enough, Israel must reckon that an invasion of Gaza will ultimately strengthen the Hamas forces it is attacking. New Hamas leaders will emerge if old ones are killed, and Gulf states will pay for Gazans to rebuild. Moreover, Gazans' discontent with Hamas over their isolation will give way to anger over new casualties from an Israeli attack. And Palestinian Authority president Mahmoud Abbas will be further marginalized in the West Bank. (Ironically, his bid to have the U.N. General Assembly endorse a Palestinian state and grant the Palestinians observer status is probably the last chance to save the concept of a two state solution from an ignominious end).
So on all fronts, a ground invasion of Gaza is likely to boomerang, by strengthening Hamas, and weakening Israel's position in its neighborhood. Better to stop now and use Egyptian good offices to negotiate another ceasefire with Hamas. That offers no permanent solution, but at least it won't make a bad situation worse.