Originally posted by: Termagant
First of all, the C-802 has a 165kg warhead. The warhead is semi-armor piercing, and basically the speed of the missile is needed to punch through the hull of the ship. The missile dives to hit the ship at the waterline which is consistent with the available pictures. The warhead could have not detonated: in the Falklands for instance the Exocet which hit the Atlantic Conveyor did not detonate, and remaining rocket fuel started a fire which engulfed equipment on the ship's deck. One of the two Exocets which struck the USS Stark failed to detonate as well.
The picture you linked to is the C-701, at television guided missile with a range of 15 km. I am not sure the INS Hanit was within this range of the coast line. Also, IIRC the Egyptian ship struck was even farther down range. The Egyptian ship being hit is consistent with the C-802. The missile is given a heading to fly on, and the terminal radar seeker is set to activate after a certain distance, and scan for targets within radar range and field of view. Any target which appears in this targeting envelop is engaged. Therefore, errors with the preflight targeting or the missiles inertial flight mode can result in the missile going active and finding an unintended target. This is what happened with the Exocet which struck the USS Stark.
With the C-701's TV guidance, I am not sure if targeting errors can occur like that.
Alleged video of the missiles launching