Israel supported the foundation of Hamas back in the 1970s by allowing them to operate in the occupied terrorities to weaken Fatah. They knew Hamas was more radical in nature than Fatah. Any growing peace initiative or diplomacy by Fatah factions could develop into general acceptance (as seen today) which would speed up the delegitimization of Israel's occupation. Maintaining a radicalized "bogy man" would lead to splits within the Palestinian factions (Gaza vs West Bank)...the more offensive the factions were to Israel, the better it served Israel to legitimise their claim on maintaining the occupied terrorities. Meanwhile, Israel was able to pursue its settlement policy under the guise of defensiveable borders and historical jewish rights. Remember Peres.
Palestinian wounded in clashes with Israeli forces two days ago succumbs to wounds (Haaretz)
from the article: Israel would lift blockade if Gaza turned to peace, Peres says