Should Israel retaliate?

My understanding is that the damage from the attack is minimal with respect to civilian casualties, couldn’t find anything about infrastructure. Iran has also said that they won’t be attacking anymore so long as Israel doesn’t retaliate.

I think if Israel retaliates they will be in a war on 2 fronts, Gaza and Iran, possibly Hezbollah joins in. They will be drawn too thin and risk an all out war against Iran.

Is Israel justified, yes but in order to maintain some semblance of peace I think they should eat the loss.