Your last point is why I feel like what Israel is doing is just straight up illogical, even from a purely selfish point of view. The only thing they are doing here is basically proving Hamas "right" in the eyes of many Gazans, and fueling a fervent desire for revenge. If someone living in Gaza wasn't already a terrorist, they sure as hell are much much more likely to be one now.
Imagine how you would feel if your home and possibly moved ones were bombed like this, losing you everything or nearly everything you hold dear. You lose autonomy over your own life, you lose your independence and rights. I imagine it feels a lot like losing rights as a minority, or something like getting an abortion becoming illegal, turned to the extreme. And these things being threatened to be done to me already cause me to feel strong contempt against the perpetrators. If pushed far enough, things like this would cause me to become a "terrorist", in the sense of being willing to strongly resist it in an attempt to maintain my rights and autonomy.
But of course, whether I would be called a terrorist or not depends on how it's framed, and how much compassion or understanding people would give me. Hell, in the US LGBTQ+ activists, or anti-racist/anti-fascist activists are already called terrorists sometimes.
I mean, I literally live in Norway, and I don't feel this. Sure, many people do struggle with depression and such, but it doesn't feel as if you're not allowed to be happy.