Part of the issue with rebuilding is that the raw materials get confiscated to support the war effort.
The bombing is at least partly related to the reduction of other options. Israel used to have the option of driving tanks in to get at some particular problem but now Gaza is so heavily mined and full of anti-tank weapons that this can't be done. It also has a significant tunnel network which makes infantry less of an option. So if someone fires a rocket at you from Gaza you have fewer options. This is just a pure strategic calculation, not really political. Part of that calculation is also the moral side, the impact on the population and the public opinion side of bombing, hence the "knock on roof" protocols and various pre-warning to allow people to evict buildings that are targets to a bomb. But surely a lot of innocent people still do get hurt, this tends to happen in war...
At any rate, this is very much not black and white. I think these days in Israel there is a lot less interest in peace mostly because getting burned with previous attempts has left deep scars in the general population. Anything that can be done to try and normalize things is welcome...