By Jonathan Marcus
BBC Diplomatic correspondent
Israeli military commanders appear satisfied with the performance of the Israeli military
Israel's large-scale incursion into the northern Gaza Strip - dubbed Operation Hot Winter - represents a significant battle in a steadily unfolding war.
By occupying two areas in the vicinity of Jabaliya and Beit Hanoun the aim of this brigade-sized raid was to disrupt rocket fire by Palestinian militants and to inflict significant casualties on Hamas's military wing.
For Hamas, the goal was to endure, to fight back, and to maintain the rocket fire into southern Israel.
Israeli military officials acknowledge that the raid of the last few days was a smaller dress-rehearsal for a much larger operation for which planning is already well under way.
Israeli politicians are using the threat of this large-scale onslaught to try to frighten the Hamas leadership into curtailing the rocket fire.
It should be said at the outset that there doesn't seem to be much enthusiasm in Israel - least of all in the military - for a re-invasion of the Gaza Strip.
The simple fact remains: despite the move into the northern Gaza Strip, Palestinian rocket fire into Israel has continued
Operation Hot Winter has already illustrated many of the potential pitfalls of any Israeli move to re-occupy a sizeable proportion of the densely-populated area beyond its northern fringes.
For a start Palestinian casualties have been heavy and while the debate about how many of them are Palestinian fighters rages, the fact remains that many civilians, including children, have been killed or injured.
This is an inevitable problem when operating in or close to heavily built-up areas.
Israeli military casualties have been small but significant, with two soldiers killed, a signal that any larger operation will have its costs for Israel too.
Israeli military satisfied
Because of the civilian casualties Israel has paid a diplomatic price as well with strong condemnation from the European Union and the United Nations.
The operation has underlined the unpalatable choices facing Israel
Public opinion in the Arab world has been inflamed.
The Islamist militants of Hamas are once again being portrayed as the vanguard of resistance; something that makes life harder for pro-western governments in the region.
The Palestinian President Mahmoud Abbas has felt himself forced to suspend negotiations with the Israelis.
Israeli military commanders appear satisfied with the performance of the Israeli military.
Current operations seem better planned and executed than many of those during the lack-lustre operations in Lebanon two summers ago.
Israeli spokesmen claim to have inflicted significant casualties on Hamas which in their words has become much more like a conventional army than an old-style guerrilla force.
What happens next?
But the simple fact remains: despite the move into the northern Gaza Strip, Palestinian rocket fire into Israel has continued.
Any large-scale move into the Gaza Strip though would require Israel to call-up large numbers of reservists
Nobody has any illusions as to how quickly the missile fire can be halted. One Israeli official, quoted in the newspaper Yedioth Ahronoth, put it bluntly; "We had casualties, and they had a lot of casualties, and throughout the entire duration the rocket fire at Sderot and Ashkelon continued.
"That is what is going to happen in the (future) major ground operation."
So what happens now? While the Israeli forces have largely pulled out of the Gaza Strip, the routine tempo of Israeli operations continues, as does sporadic rocket fire from the Palestinians.
Potentially this latest flare-up could die down, but the same dilemmas would re-emerge next time tensions escalate.
Much depends upon the impact of the Palestinian missile fire. If it fails to subside, or worse, causes significant casualties, then a further operation like Hot Winter could be on the cards.
Any large-scale move into the Gaza Strip though would require Israel to call-up large numbers of reservists.
This though raises the question as to what then? Israel has already left Gaza once. What would be the exit strategy this time? Who would it hand power over to?
No wonder then that opinion polls show many Israelis reluctantly eager to explore some kind of deal with Hamas.
Hamas too has been hinting at a possible temporary accommodation; a sure sign that it wants to avoid an all-out Israeli attack.
But many Israeli defence planners see a truce of some kind as a mixed blessing. Hamas would be free to consolidate its position and stock-pile large quantities of longer range missiles.
One leading Israeli commentator has described the choice between talking to Hamas and a major move back into the Gaza Strip as one between cholera and the plague!
Operation Hot Winter has served to underline the unpalatable choices facing the Israeli government should the rocket fire not subside.