"It's October 8, 2023. What should Israel do in response?" The could haves, should haves, would haves no longer matter. The ask is cannon fodder for the debate.
The universal truth is violence and loss of life begets violence and loss of life.
The planning for October 7th was extensive, going back years, with the full on intention to cause as much damage and loss of life as possible in a short period of time. But the motivations go back even further illustrating neither Israel nor Hamas has learned very much from all the fighting. 2006, around or about, both sides of this have been full on determined at a minimum to annoy one another but more consistently try to harm one another. In a multitude of ways. The ideology that allowed Hamas to come to be going back much much further.
Trying to justify going after Hamas to get their people who were kidnapped is one thing, trying to justify the wholesale killing of as many Palestinians as possible to root out Hamas is another. No matter what Israel thinks it will achieve the ideology will still be there even if Hamas is not carrying that flag. Iran has plenty of proxy groups in the region, Israel is now in a multiple way conflict with several of them with no real end in sight with several of them.
And that should tell you something historically speaking.
While we argue who is more right than the other, who is guilty of this or that, who gets understanding and who does not, ultimately what we have seen proven beyond all doubt is the next several generations will see exactly what the last several generations have seen. More violence and loss of life. No matter what all these groups are called tomorrow, all we are seeing today play out are recruitment tools for that next several generations. Israel included.