What he's talkingh about is "decimation". Because you see, there IS no "exacting a heavy price" on Hamas, et al. Cast Lead made that apparent. A major operation sends it underground, which leaves the civilian population to receive the the brunt of that "heavy price". So what he's essentially getting at isn't much different than soldiers rounding up 10, 20, or a hundred villagers, and executing them because of an attack by the local underground. Same philosophy - different mechanics!
UN experts: North Korea continues to evade UN sanctions (AP)
from the article: MK Mofaz: Netanyahu cabinet is hurting Israel's military deterrence