Russia has no good options here. Russian military retaliation brings the absurdly pro-Israeli American public opinion and Washington establishment into play. Doing nothing signals weakness and invites more provocations
It's technically possible the Russian Il-20 surveillance plane was downed only as a result of stupidity and incompetence on the Israeli and Syrian side, and without a devious Israeli plan to set it up. Militaries almost always are among the stupidest and incompetent of all government bureaucracies so it's in the realm of possibility.
Nonetheless, the fact that Israel this time failed to give adequate warning to Russia is a strong indicator the IDF at the very least wanted to use the Russian plane there to cover their fighters, which it must have known would put it at a certain amount of risk.
If so then I think Israel may have done it in safety of knowing that if a Russian plane is blown out of the sky by Syrians -- even if the IDF is ultimately responsible -- it's a win-win for Israel.
Think about it. Just hours after calling off the Idlib offensive in a massive concession to Erdogan and indirectly to the West, Putin is repaid by a Russian military plane being shot down as result of an Israeli attack on Syria. Talk about egg on face.
When Turkey ambushed and shot down a Russian Su-24 on the Syrian-Turkish border in November 2015, Moscow limited its response to economic sanctions. This eventually helped moderate the extent of Turkish ambition in Syria. End to tomato imports however won't do much to impress Israel.
If Putin sticks to economic and diplomatic means of retaliation alone Russia will look comparatively weak. This will embolden the hawks in Washington who will have an easier time selling the idea pushing Russia around in Syria and hitting Assad does not actually risk WW3 – thus increasing the chances of what Israel really wants in Syria; more chaos and for the war to never end.
At the same time, if Russia retaliates militarily instead, this – thanks to the unparalleled amount of sympathy Israel enjoys in the US – also boosts the likelihood of what Israel wants. Imagine for example that Russia declares its forces in Syria will from now on under certain conditions actively participate in the defense of host country against Israeli airstrikes and actually fired against them the next time. What effect would that have?
A likely result would be a war fever in the US. Wacky Protestant Evangelicals, Russia-hating Liberals and Trumpian Israel-Firsters could all unite under the banner of protecting tiny, pluck, democratic Israel from the menacing Russian bear. It would be like the narrative on the 2008 Georgian-Russian war (in which Georgia attacked the even tinnier South Ossetia along with Russian peacekeepers) except it would resonate far more so because it's sainted Israel.
For Russia its US relations would deteriorate even more, more US financial would be a certainty (it already is, but the pace would be ramped up), and the chance of US muscle stretching in Syria and the associated dangers of a US-Russian clash in the region would go up. Meanwhile for Israel the result would be a flurry of popular and diplomatic support from the Americans with a possible bump in military aid. Not a bad deal at all huh?
Inevitably whatever happens some will end up criticizing Putin for not doing enough to restore Russia's military honor. Other will question the wisdom of setting up shop in Syria in 2015 when Israelis and the Americans were already deeply involved in the conflict militarily and involving Russia in this dangerous mess in the first place. Both will be correct.
Correct also will be those who will note that Russia's intervention (any innocent civilians it killed or maimed aside) in Syria did a lot of good, but that neither Russia's nor Syria's position is all-powerful and that sometimes it's wiser to swallow your pride and keep your eyes on the finish line.
Of course, others will say that with Idlib offensive postponed and potentially called off for good, Putin may already be showing signs he may be happy, or may think it wiser, to leave things only half-finished.