The Israeli reaction does seem excessive. Some analysis is suggesting the main problem is internal Israeli politics. The Prime Minister is not percived to be strong on security, so when something like this kidnapping happens, he has no choice but to react strongly, regardless of if this huge response, or some careful behind the scenes diplomacy would be more likley to recover the soldier.

I also think CarolC is correct. This was probably planned, or at least timed, to sabotage the recoginition of Israel.