I am not such an idealist that I don't think that Israel's (or any other nation's) foreign policy shouldn't be based on a bit of the old "carrot and stick"; even if sometimes the stick needs to be military. Not everyone, after all, is amenable to calm fair and rational persuasion. (Nor are your own country's interests, let's be honest, always fair and rational.) However, the trouble with Israeli policy towards the Palestinians is that is has traditionally been all stick and no carrot. The rational goal of Israeli military, political and economic pressure on the P.A. government should be to get them to agree to policies - compromises from their perspective- more in line with Israeli interests. But Israel only applies pressure. There is no compromise offered - no carrot.
For years this was Israel's policy vis a vis Jordan. The result was that Jordan washed it hands of the whole Palestinian issue. Fatah - with Arafat at the head - took control. But Israel, with the possible brief exception of the Rabin government, refused to offer any significant carrots to the Palestinian people themselves (though it did try to essentially bribe the Fatah leadership with many perks and privileges.) Finally, bereft of any carrots to show its people, Fatah lost control to Hamas. Now Israel has turned up the pressure to the highest level yet. The Israeli seige of Gaza, its withholding of Palestinian tax money (that it still collects, BTW),and the boycott of the Hamas lead P.A. government which it has promoted, have reduced Gaza to a level of unprecedented poverty and chaos. Hamas itself is loosing control. Gaza will soon be another Somalia.
But politics, like nature, abhors a vacuum. If Hamas looses control, the result will not be no opposition to Israel. More likely it will be the rise of the even more fanatic factions like Islamic Jihad and even Al Qaida linked groups. This has been the pattern for 40 years. The longer Israel waits for a "better" partner, the more the extremist on the other side gain influence and power.
The rise of groups even more extreme than Hamas can be seen to be happening already in the Palestinian camps in Lebanon. To quote an article in today's Haaretz
"It is not a coincidence that the Muslim extremists have situated themselves in this refugee camp and in other camps in Lebanon where there is no government presence and no law and order."
"This is precisely the direction the Gaza Strip is taking. Abandonment by the government, lawlessness and poverty are fertile ground for the organizing of terrorists. In Gaza, similar groups ostensibly operating in the name of Islam have already been spotted. In this context it is perhaps worth reconsidering the boycott of the Palestinian unity government in which Hamas is a partner. The boycott is increasing the bitterness and distress, weighing down on Hamas and encouraging the development of organizations along the lines of Fatah al-Islam in Lebanon. It is not only the Palestinians who will pay the price for this, but also Israel, which did not want Hamas and is getting Al-Qaida. This appears to be the opinion of British Prime Minister Tony Blair, who said at the end of last week that Hamas is sending positive signals concerning peace, and hinted that these should be answered."
Israel should not view negotiating a long term truce with Hamas as a defeat. It is the carrot that Israel should have been offering all along. The alternative may soon be the absence of any partner for any discussion whatsoever. In other words, eternal war.