"Blood libel" has been used a fair amount without the full weight of historical context, even in Israeli politics.
Palin is both stupid and ignorant, and I have no reason to think she thought the phrase would be especially offensive.
However, the discussion about blood libel has overshadowed this from Palin:
"Within hours of a tragedy unfolding, journalists and pundits should not manufacture a blood libel that serves only to incite the very hatred and violence they purport to condemn.
I think she knows what "purport" means, and she said journalists are at best neutral about hatred and violence, and possibly in favor of it.
This is horrendous.
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