The truth is that Syria and Iran are pulling all the strings for Hamas and behind them is Russia and the former KGB. The Palestinians also rely on the Arab and Iranian oil money and they know that would dry up as soon as they made peace with Israel. For the time being, I think the Israelis are making the right choice by building a wall around Israel and unilaterally withdrawing. As one poster put it, this way Israel may be able to avoid suicide bombers with the subsequent Israeli retaliations which create mass casualties among the Palestinian civilians. But think about the long term. If the Palestinian's lives just get shittier and shittier and their leaders just remain corrupt terrorists or religious fanatics what's going to be the outcome? Let's assume for one minute that we could get the Syrians, Iranians and Russians out of the picture. Then perhaps Israel could take a leadership role in proctoring some kind of Palestinian leadership that would actually be good for them both.
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