Hamas is prepared to martyr their own people without a moment's hesitation. The trouble up till now is that the IDF has been inconsistent. Targeted missile strikes have been very successful in the past, but for some inexplicable reason, the government grants Hamas a ceasefire, ostensibly for "humanitarian" reasons, whenever it looks like Israel is gaining the upper hand. The IDF needs to finish the job; i.e. finish off the entire leadership of Hamas. Cutting water and power is illogical. The best way to stop rocket attacks is to go after the people sending the rockets, not their neighbors.
IDF soldiers find improvised weapons and ammunition at Jenin refugee camp (Haaretz)
from the article: U.S. lauds Israeli restraint in face of Qassam rocket attacks