Doing a wholesale slaughter would be a public relations disaster for Israel. Instead, Isreal spurns Hamas' offer of an indefinite ceasefire, ignores the Arab League resolution and chokes supplies and services in Gaza. Any action in retaliation will achieve a two-fold object for Israel; justify a military incursion, destroy the Annapolis summit even before it begins. Israel can use its jets and tanks to destroy Gaza further and squeeze out its people - what Illan Pape has described as slow genocide.
Route 1 to Jerusalem reopened to traffic as fire outside of Jerusalem continues (Haaretz)
from the article: ANALYSIS: Israel's real intention behind sanctions on Gaza Strip