For better or worse, this post is likely to leave the reader with more questions than answers. I'd love any input/comments that readers have on the matter here (as always).
Before the assassination strike on Hamas' military leader Jabari, Hamas political leadership was making serious noise about a permanent truce with Israel (in fact, Jabari was literally reviewing a draft peace agreement the day he was assassinated and had been part of discussions with Israel and Hamas' political wing about making it happen), and West Bank PM Abbas mentioned he was potentially willing to waive Right of Return for Palestinians as part of a final peace deal with Israel. It seemed, politically, that Israel was largely getting its way.
Then why the assassination? Why the war?
There are potential motivations on both sides for going to war, which we'll outline below. Not clear at all to me which was the primary motivator.
Hamas is, of course, far from a united organization. In particular, I must be careful in the use of the word "Hamas" when describing behavior from Gazan militants, as not all are necessarily formally associated with Hamas and may not represent Hamas' interests. In this case, Hamas extremists or other militants likely wished to disrupt the peace process, unsatisfied with its provisions and worried that it might go through if the peace process continued unabated. Hundreds of Hamas rockets were the opening salvo in this eight-day war, and so the above explanation is a reasonable one to answer the question, "why did these rockets launch _when they did?_" If the motivation was 100% on the Hamas side, then we would say that Israel simply "took the bait" and was manipulated into war that disrupted a peace process that they would otherwise be in favor of. The assassination of Japbari, in this case, would have been a strategic blunder to an Israel otherwise very interested in peace.
More legitimate wings of Hamas may have also approved of these rockets in order to sabotage the peace process themselves, in order to make sure there was a clear pretense of peace on the Hamas side without risking having to actually stick to it, in order to win the support of the Arab world, in particular Morsi. If this was the intent, it worked--Morsi was able to broker a ceasefire and very clearly backed Hamas in the war, which would be the first time Egypt supported Hamas against Israel since the 1970's.
Frankly, the Israeli defense authority is highly sophisticated and I believe it is unlikely they simply made a mistake and, in response to rocket fire, assassinated _in error_ the man most likely to be able to broker a peace deal with Hamas permanently. The reason I am particularly suspicious is that the assassination of Jabari was among Israel's first strikes, rather than simply strikes against Hamas' rocket sites. I believe, like in the case of Hamas, there are some political incentives that made parts of the Israeli government want to disrupt the process as was.
One explanation is simply that Netanyahu could not appear "soft" during negotiations. If Israel calmly/peacefully negotiated peace as rockets hit its civilian cities, it could potentially be seen as "soft" on Hamas and thus in a weak bargaining position. If Israel saw Jabari as trying to play both ends--authorizing strikes against Israel and also trying to push a peace deal--then Israel may have intended to send a message to his successor that "playing both sides" against Israel would not do. Unlike Israeli troops, Hamas rocketeers are generally woefully under-accountable in the international media for their attacks, and if Jabari intended to use this to his advantage, Israel may have felt the need to put a quick lid on it and allow Jabari's successor to restart such negotiations with more caution and restraint.
Israel could have also "read" Hamas' intent--if it was to simply gain an upper hand with the Arab world through credible noises of negotiation, rather than actually push for peace--and wanted to stop this process in its tracks before it lost leverage in the region, though Israel seemed to summarily fail in this.
Israel's current leadership may well not intend for peace with Gaza any time soon. Peace in general may simply be unacceptable to an administration that sees Gaza as an eternal threat for Iranian influence and other forces that may be out for the demise of the Jewish state. Israel may have a quiet policy of no peace with Hamas until Israel's legitimacy as a state is recognized. For various reasons, Israel may see constant war with Hamas (including a blockade of Gaza to minimize the armaments and militants that can enter) as a safer alternative to peace, as counter-intuitive as that may seem. If this is the case, it will continue to sabotage peace efforts until there is a better way to guarantee security in a free Gaza situation, or until a more short-term risk-accepting administration takes the helm.
Finally, Netanyahu may simply want to take advantage of wartime fear for his own election in January. Hamas rockets may have been just the pretense a Machiavellian-style Netanyahu (if that is actually his thinking, which is not clear) would need to have a brief flare-up with Gaza in order to convince swing voters in Israel to vote for Likud rather than Kadima or Labor, keeping Netanyahu in power for another term.
Whatever the reasoning, it is more or less evident at this point that some parts of both Israel and Hamas had interest in disrupting the peace process, and took advantage of this time period to act. To set the record straight, Hamas' rocket attacks on Israel did happen before the assassination of Jabari and seemed unprovoked--this accounting of events is not clear in all texts. But I also believe it is fairly naive to think that Israel's assassination of Jabari specifically (rather than simply a precision strike against Hamas rocket sites, which it also successfully executed) was simply part of a general defensive strategy rather than a very political move.
Such an interpretation would suggest that peace is likely to be elusive in the area for some time to come.