Why would God would give us challenges as difficult as the war we are going through right now?

Not everything which happens in our individual & national lives results from "reward and punishment", which is just one, albeit important, of the many factors involved. Life also includes the interaction of all people's free-will ("Hishtadlut") and God's "running the show" in the best possible way (Bitachon) for each respective person and for Am Yisrael in general (pretty complicated!). The Hamas also has free will and they chose to do evil, which often hurts many innocent people (for God no longer does super-natural miracles). God also runs Jewish history, which in our generations centrally includes His desire to redeem Am Yisrael, whether we deserve it or not (but rather out of love, His covenant with the fore-fathers, to stop the Chilul Hashem (Desecration of His Name) of His nation being slaughtered, and our merits of self-sacrifice of these generations). Accordingly, big historic "game-changers" like the recent terrorist slaughter and Israel's significant loss, inevitably and naturally opened many eyes to the folly of Israel giving away Gaza and Gush Katif, and the national understanding that a two-state solution with such religiously fanatic & barbaric neighbors, even with our Baruch Hashem, great technology and army, is not an option. That being said, we have to focus on our (!) side of this complex equation, and don't worry, God will grant us that which is best for us (BTW, that often doesn't mean the easiest!!), and in the end He & His nation will certainly win (see my lecture: https://www.yutorah.org/lectures/1077098). Our role is to destine our fate, and succeed through emulating the Godly ideals as expressed and commanded in the Torah and mitzvot, centrally including selfless giving and unity. There is also an important differentiation between my free-will, which is in my control, and that of my neighbor, which is much less so (e.g. I can and must lovingly try to bring them closer to the Godly ideals, but it's his decision). Accordingly, each of us must utilize the painful current circumstance to ourselves become more giving and less self-centered, and the volunteering and amazing achdut (national unity) felt today especially in Israel and especially in the altruism of the Israeli soldiers, but really all over the Jewish world, is clearly an inevitable, beneficial and Godly outcome of this war. Undoubtedly, if we continue this thoughtfulness and achdut afterwards, perhaps God will intervene and save us earlier for we wouldn't need such catalysts. Such "cheshbon hanefesh" (soul searching) is appropriate & permitted to be done by each one for himself and not for others, especially since already a century ago, the greatest rabbis including the Chazon Ish & Rav Kook, wrote that the non-observant today are not really responsible for their non-religious actions, but are simply products of their society and education. In short, the inevitable outcomes like national unity (even of Haredim & Jews abroad who often don't participate outside of their communities), indignation & pride, political understanding, improvement of our (and the hostages) Tehilim & prayer kavana (concentration), and some of the hostages & survivors accepting religious observance, are all obviously connected, but we can't fathom all of the complex factors through which God runs the world & especially regarding the ge'ula (=redemption) process. We also must pray that our Father and Beloved should give us victory asap (for only He can save the hostages) with the fewest casualties, and that the spiritual and national eye-openings and improvements should be permanent and idealistic and not painful. "God will give His nation bravery, He will bless His nation with peace" (Tehilim 29, 11). Rabbi Ari Shvat