Deterrence via a show of overwhelming force never works? I strongly disagree, historically it has prevented significant numbers of wars and attacks, and I suspect it is the reason why in recent decades Israel has only been attacked via guerilla actions and not openly by hostile neighboring states. Pax Americana would not be possible if this didn't work.
Will it work in this instance? Hard to say, Palestinian reprisals seem hard to deter given that they persist despite how many times they have been overwhelmingly defeated or how many carrots and sticks Israel provides. I think this time the goals might be different though, I would not be surprised at all if they level the north of Gaza and move the wall after they've taken out Hamas targets there.
The latest news about Israel's intentions in Gaza seems unusual but not very specific: