So that's that's how it happened:

A Reuters mistranslation of remarks by Israeli Deputy Defense Minister Matan Vilnai this morning has triggered an international news libel against Israel. Among the news outlets jumping on the bandwagon are those that have previously been accused of deliberately attempting to stir up anti-Semitism through false and inflammatory coverage of Israel...
Reuters: Israel minister warns Palestinians of "shoah"
The BBC: Israel warns of Gaza ‘holocaust’
The Guardian: Israeli minister warns of Palestinian ‘holocaust’
The Times (of London): Israel threatens to unleash ‘holocaust’ in Gaza
In fact Vilnai said this morning in off-the-cuff remarks made on Israel Radio that: "The more the Qassam rocket fire [on Israeli civilians] intensifies and increases its range, the Palestinians are bringing upon themselves a bigger disaster because we will use all our might to defend ourselves." Vilnai used the word "shoah" (meaning disaster), which Reuters mistranslated as "Holocaust," which is "HaShoah" in Hebrew. It is like confusing a "white house" with "The White House."

This is coming from the news organization that is willing to use the "terrorist" label for only one of the parties in the Israeli-Palestinian conflict - want to guess which one? Interesting how academics, media sources, and foreign policy elites will go out of their way to interpret, reinterpret, and re-reinterpret statements like "Israel should be wiped off the map" as anything but what it obviously means - with the result coincidentally being anti-Israel. But then they'll go out of their way to deliberately misinterpret Israeli politicians - with the result coincidentally being anti-Israel. And by interesting, we mean predictable.

References:
* Reuters mistake triggers Israel “Holocaust” libel [Tom Gross] [NRO Corner]
* Beit Hanoun Meme Watch - (8) "Israeli Terrorism" - Want To Guess Who Reuters Is Willing To Label A Terrorist? [MR]
* The Denial of the Obvious By Reference to the Irrelevant: Center-Left Foreign Policy and Democratic Politics [MR]

Previously:
* International Media: "But Saadat is a Grandfather!" Also, BBC Tells Demonstrable Lie About Past Kidnappings, Makes Up Conspiracy Theory, and Says "Foreigners mostly live harmoniously among the Palestinian population"
* Massive And Peaceful Gaza Protest Neither Massive Nor Peaceful
* Reuters Coverage Of Iran's Holocaust Conference: Sigh