Israel has created an opportunity to invade Gaza again. This gives it a chance to kill or wound hundreds of Palestinians, with an excuse to shield the killers from prosecution.

This is retaliation for rockets launched from Gaza, generally not by Hamas. These rockets are quite warlike but almost never hurt anyone. Effectively they are like a raised fist, which Israel generally responds to with attacks that kill plenty of civilians.

This cycle of violence started with the murder of three Israeli teenagers, to which Israel responded by arresting hundreds of Palestinians unrelated to the murder (generally without charges), and sending troops into Arab areas to harass large numbers of people. This predictably inspires young Palestinians to throw stones, which is an opportunity to shoot tear gas, which often injures people, and also an opportunity to shoot bystanders dead. It's even possible for a soldier to kill Palestinians with rubber-coated steel bullets or tear-gas canisters.

Israeli civilians living in colonies ("settlements") in Palestine are launching attacks against nearby Palestinian villages.

Here's Juan Cole's analysis.