You make a good point about distinction between terrorism and terror. While I do not know for certain that Israel bombed a hospital, I will speculate that if they did do so, that they did so for a reason and that for the most part the people in that hospital were given advanced notice. I do not believe that Hezbollah gave any advanced notice to any Israeli before their rockets struck.
Hezbollah uses people as human shields and they are the ones that should be blamed for the colateral damage, not Israel. Israel may have dropped the bomb, but it was Hezbollah that made it a target, and did so knowing that inocent people would die as a result. If Israel did not attack these human shielded bases of Hezbollah operations, then this tactic of using inocent people as human shields would become standard operating proceedure in Hezbollahs play book.
I would like to point out that in many instances following a terrorist attack in many countries over the years, many inocent people have died as a result of that countries efforts to end the terrorist siege. Russa, Germany, England, spain, and even France have all been forced to do things for the greater good that in the short term killed inocent people. This is most unfortunate and most regrettable and should never be taken or accepted as affordable losses. In that regard Israel did go to great lengths by dropping fliers to warn people to leave and or evacuate prior to any bombings.
As to whether or not they should have dropped those bombs I can only say that I wish that they had found other ways to achieve their objective other than destroying the homes and infastructure of inocent people being used by the terrorist group Hezbollah during their unprovoked assualt on Israel.
EDIT:
I would also like to point out that if Hezbollah is saying that Israel bombed a hospitol full of injured people that it could be a set up. Hell for all we know, and according to at least one news organization and blogger, Hezbollah has doctored up photo's, used many people several times, a women crying infront of a bombed out building, and then the same women as a victim of a bombing. A man as a rescue worker then was shown as a dead victim following a bombing, then seen again as a supporter of Hezbollah. I choose not to believe anything that comes from Hezbollah and question any news report that indicates that Israel intentionally bombed a hospital full of injuried people. Chance are that the source for that news came directly from Hezbollah and therefore is questionable even if reported by a lagitimate news organization. Look at all the things they have gotten wrong in recent days to know that even the best news organizations can be dupped. All I am saying is keep an open mind and take nothing on face value. There is more to be gained by propoganda than by truth. And truth is often harder to come by in the face of a well organized campaign of propoganda. In war the truth is often the first casualty.
Israel had nothing to gain by alledgely bombing a hospitol full of injured people so I don't buy that they did so. If they did bomb it, I do not believe that it was a benevolant act.