I don't see how getting Hezbollah involved increases the impact on the Saudi deal, except by making Palestinians suffer worse casualties. Hezbollah has much less Saudi sympathy than the Palestinians. It is also a more valuable pawn to sacrifice, if your goal is just to get pictures of Israel killing arabs.
About the Lebanon situation, I'm much more sure that it will make Palestinian casualties rise than that it will make Israeli casualties rise. My impression (from public information) is that Israel is capable of destroying both Hammas and Hizballah pretty quickly if it is willing to play dirty enough. And my impression about Israel is that it care about ethics, but not enough to allow an existential threat to exist. So in such situation I expect Israel to be super aggressive against Gaza in order to end it quickly and focus on Lebanon.
Yes. Then again, eventfull 17 years passed and minds could change (I don't think it happened to be honest)
On 1, I agree that there are some Israelis that view them collectively as evil, and would harm them instrumentally without much thought. Hard to put numbers, but I guess that those are ~15% of the Jewish population. I don't think that there is more that 1% that support direct violence against non-terrorists for its own sake (as opposed to "we really want to kill your arch-terrorist neighbor, and you happen to be there too, and we really can't wait until you aren't home") even in a state of war. I don't say my opinion about it, just that it is very different from the apparent Palestinian attitude.
On 2 I agree. It seem to be a general argument for judging people relative to their society, but this question is hard in the general case. As an anecdote, taking over the and contra-brain-washing the next generation was very successful in post-war west Germany. It is hard though, and probably work only under very specific conditions.
Maybe it is more helpful to speak in terms of subgoals: Israel try to achieve security. For that, it try to keep Hammas both quiet and weak. The externality of most ways that we keep them quiet is better life for Palestinians, and the opposite is true for making Hammas weak, with larger effect size.
(I believe most Israelis also care somewhat about Palestinians having better conditions as a terminal value - though probably not enough to effect policy, except for avoiding unnecessary harm. I don't know from the inside about Palestinians attitude toward Israelis, but public information suggest that many of them wish us harm as a terminal value, even when in expense of other goals)
I'm not sure whether our disagreement comes from different perceptions of specific populations/parties in Israel, or from you writing about current positions while I meant to write about the positions before the attack. Today, I sadly agree that it is far more than 1%. I hope and expect that the change is mostly temporary, and hope that it will not bring us to do things that we will be too ashamed of in the meanwhile.