Goldstone and the yet to be seen fall-out has shown that a sovereign state (if it happens to be Israel) cannot retaliate against a rag-tag bunch of terrorists without incurring world-wide condemnation from the sympathetic and fence-sitters. If a Pal state in WB started doing the terrorist thing, it would be an unimaginable situation not being able to put things in order. Conversely, the Pals don't really want a sovereign state, since they know that the missile game would no longer be considered a cute little child's game. It would be an act of war, and could spell annihilation.
Iraq calls Turkish assault on Kurdish militants a dangerous escalation (Reuters)
from the article: Netanyahu: Israel and U.S. have resolved settlements row