For Israel Hamas is the perfect "terrorist". They hardly do anything at all except sporadic rocket launches that land in the desert. They barely qualify as a resistance. Israel can take this "resistance" to the bank over and over again, getting money and concessions from America, the EU, and the UN. Hamas has long ago renounced suicide bombings and they have, one several occassions, indicated that they would support a peace based on the 1967 borders. I am sure that Israel must be giving money to Hamas in order that they roleplay as a "terrorist" group in order to benefit Israel. This would also explain how Israel does not go after the top echelon of Hamas, except those that may be getting antsy with the arrangement.
Donald Trump: Israeli settlement construction in West Bank should 'keep going' (Haaretz)