Jim,
"Do you consider the killing of hostages acceptable in these or any circumstances - yes or no?"

It would be easy to say no.
That is what my heart says.
Hamas says, "We will kill your civilians, and you must not try to stop us or you might kill ours."
Human shields are not the same as hostages. Their use is a war crime.
In the end you have to strike at the civilian killers and just do what you can to minimise innocent casualties.

Straight answer to your question, in these extreme circumstances, some civilian casualties are acceptable.

Straight answer from you now.
Are the rocket attacks wrong, and should they stop?