I am not really sure what you mean with their settlement. If you just mean the existence of Israel, then yes it's fine to support that. If you are talking about their actual settlement policies, then no. I don't think supporting a system of displacing people you deem "inferior" or "unwanted" to make room for "superior" people should be supported.

How to feel about the military response to the attacks is purely a personal choice. A fight against terrorists is never clean. And whether or not the amount of "collateral damages" is acceptable is up to you. I personally think that the attack by Hamas were extreme enough to warrent the response by the IDF. I don't think you can expect someone to just turn the other cheek in this scenario. But I totally understand people who say any amount of civilian casualties is too much.