Israel is concerned that it can't fight a war and win it, if Hezbollah and Iran intervene while they are bogged down in Gaza. Hezbollah and Iran may never get a chance as good as this again to give Israel a bloody nose.
Israel want's to escalate by bringing the United States into the conflict on their side so the US can take care of the border to Lebanon and Hezbollah/Iran.
By atacking the hospital they massively escalate and provoke Hezbollah/Iran as well as the Arabs all over the Middle East. Israel needs to light a bigger bonfire and draw allies into the flames, because a Israeli defeat, or non-victory, has profound consequences for the West in the Middle East and beyond.
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