Israel is already lost in Europe. And it would take more than this to shake the US support. What about the 'innocent' lives that were taken by homicide bombers? Surely you aren't suggesting that when Israel accidentally kills innocents it's worse than homicide bombers purposely taking the lives of children?
All war is politics - and this was a very poor political move. When the civilian casualities out number the military casualities in an operation you have a very bad political equation.
If the intent of Israeli operations were kill all of Hamas, Islamic Jihad, PLO etc. and damn World opinion - then small tactical nukes would be an answer. However, that is not their aim, for they recognize that they must still operate in the world after peace breaks out or hostilies subside. Therefore, "Heavy Handed" moves like last night are not helpful in the long-term politicial goals arena.