IMO Israel is digging its own grave in the region by being so unwilling to work with their neighbors. KSA and UAE are brutal to opponents and KSA's own meddling in the region shows that they'd do anything to keep militant Islamism from gaining a larger foothold in the region. All they had to do was to open up a dialogue with their neighbors, it would have stopped Muslims from unifying around this issue, probably normalized relations even further between these states, and would have given Israel significant leverage in the region as a bulwark of diplomatic stewardship. Now even though the US is doing everything they can to tow the line between supporting Israel and stopping a bloodbath, Israel itself has probably lost any and all support from its neighbors sans maybe Egypt, and the US will be hard-pressed to offer support in further instances of aggression against Israel.

I'm less sure. I think the most salient conflict in MENA is between the Arab states and Iran, not Israel and Palestine (look no further than the grim track record of the surrounding states at actually helping Palestinians for evidence).

It's hard to look at October 7th and its aftermath as anything but a setback for literally every party in the region. Even Iran seems to have been caught flat footed.

In one respect, October 7th was a success for Hamas. Before then, it looked likely that most of the Arab countries would have made peace with Israel without Israel having to concede an iota on the Palestinian issue. After the attack and Israel's response, Israel probably has to make visible progress on the issue before the current holdouts would move forward, or at least wait 10, 15 years before everything is forgotten.

It's a victory for militant Islam that didn't need to happen. KSA, UAE, Oman, and Turkey could have been great examples of Muslim countries with high standards of living that engaged in the international diplomatic process, as opposed to the pariah states of Iran and the wartorn Yemen and Syria. Since the decline of ISIL Islamists have achieved little save the Taliban taking Baghdad in Afghanistan. But with this new round of aggression in Palestine, Islamist movements once more have a grievance to look at.

It would end up in a proxy war, surely. Iran would back Hamas and a coalition of KSA, UAE, Egypt, and Israel would spearhead the Gaza situation from the other side. It's still a shitty outcome but IMO a better one. For one, regional actors are incentivized to deal with the situation in a way that spillover doesn't affect them (Lebanon and Egypt have both been vocal about not accepting refugees), but most importantly it wouldn't be as affected by the US political news cycle and the heart-rending imperialism that creates (essentially American domestic interests and politics affecting regional politics in the Middle East, meaning Palestinians have no say over their own politics in any meaningful way, unlike American college students.) The biggest risk would probably be Russian and Chinese interests coming into the region which would surely prompt a US reaction, but I'm not sure how much Russia or China would have to gain here if the US were not involved.

It would have probably ended in a civil war type situation but at least you wouldn't have widespread famine or the bombing of hospitals or further civilian atrocities. Also forcing regional states to allocate their own resources to the conflict means there's a direct incentive to wind it down since their resources are a lot smaller than the resources of the US. Israel would eventually face domestic pushback over wartime spending and the autocratic states in the region would have to balance their funding of the proxy conflict against their own ambitions and budgets. Iran is somewhat democratic and they too could only fund Hamas so far before looking after their own affairs. A civil war would also create a generation fatigued by conflict and more open to compromise. The unilateral nature of this conflict will guarantee that Palestinians and dissidents in the region will hold this as a grudge over Israel and the US for decades and might even open the possibility of further terrorism against the US.

The US's own nation building efforts in the Middle East after 9/11 flagged due to outrageous spending that materialized in minimal results. The same effect with poorer governments would naturally circumscribe the conflict in the area.