What you suggest wouldn't embolden the moderates at all. In fact, it may serve to put even more unfortunate souls in the right wing camp, as people would view it as prolonging the immoral and brutal occupation. And they would be absolutely right. Only difference is that Israel would have dropped the pretenses, and actually acknowledge what we have LONG known: That the occupation of Gaza NEVER ended.
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Defense Minister Moshe Ya'alon: No sign of terror wave subsiding (Haaretz)
from the article: More than 5,000 Palestinians cross newly opened Gaza-Egypt border