This article (not yet on the English Haaretz site) says that yesterday military secretary Mike Herzog called Defense Minister Ben-Eliezer who was still visiting the UK and told him that there was an opportunity to kill a senior Hamas member with an air attack and that the chance of injuring civilians was "not large". After Ben-Eliezer OK-ed the operation, Sharon went ahead with it quickly so as not to lose the "tactical opportunity".

Update: Haaretz (again in Hebrew only) says that Shehada was killed with a large bomb, rather than missiles as is usual (missiles cause less damage).
Maybe an ill-considered switch was made because Shehada was such a significant target.

There was much discussion on Army Radio today about the kids killed in the attack (I'll try to write a summary later, really...)