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Israel has gas and could be pumping gas from the southern field just as it has with the fields divided between Israel, Lebanon, and Cyprus. An alternate canal makes no sense. It would be prohibitively expensive, be an environmental nightmare, and wouldn't solve the strategic issues with the Red sea. The problems in the Red Sea are at the southern entrance with Somalia and Houthis.

How could they not have gotten wind of Hamas plans to attack? Did they and someone did not take it seriously?
The Mossad and Military intelligence are run by the LEft in Israel. Since 1993, the Left in Israel are Oslo Process fanatics, who literally refuse to pay attention to what the PLO and Hamas say, as it would force them to change policy. Intel officers quoting Hamas etc are forced out or just not promoted. A year ago, the US and global left including their collaborators in Israel were pushing the notion that Hamas was moderating due to having to run a state and was fighting Palestinian Islamic Jihad and Isis Gaza. Worse, Israeli intelligence was busy with the Biden attempted color revolution against Netanyahu. The last thing the intelligence services or security state wanted was an attack that would kill the "two state solution" for a generation.