In Night, how do the Jews react to the arrival of the German soldiers into Hungary?

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The first chapter details the feelings of the Jewish community in Sighet. It appears that they fill themselves in false optimism, choosing to ignore the very real threat that faces them as a community. Even when Hungary is invaded, and they receive news of how the Jews in Budapest were being mistreated, they choose to ignore the very real danger quickly:

The news spread through Sighet like wildfire. Soon that was all people talked about. But not for long. Optimism soon revived: The Germans will not come this far. They will stay in Budapest. For strategic reasons, for political reasons ...

Note how the last sentence indicates the way that the Jews were intentionally choosing to ignore the threat, making up excuses to imagine their quiet lives continuing untroubled. However, in spite of this false hope, the German Army enters Sighet in three days.

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