Even during Arafat that was a very troubled issue to deal with - of getting everyone on the same page. No matter what kind of deal happens, there will always be those on both sides who are not satisfied. So what do you do when you are trying to make progress, but a group keeping running and blowing stuff up? In the past, the IDF didn't do a good job of punishing the right people. Instead you have a type of collective punishment - and we've seen where that has gone.
On the other hand, most Palestinians do see the chance to live with Israel - but they want 1967 lines where they at least have a largely contiguous nation[of course we would be talking about Gaza and WestBank] that they can control and provide for. However, there is hatred simply because they are Israelis because children of children are growing up in large refugee camps that might as well transform into new cities at this rate. Hamas itself has repeated its emphasis of the potential of a "long term truce". In my serious opinion, I think Hamas is a LOT more practical thank we think - but with such a polarized Palestinian movement right now how can you ensure your power and control over people by saying immediately "okay Zomg we totally accept Israel". They would alienate a lot of their supporters who want a - full - liberation of Palestine.
So what do you do in the mean time? You say that a "long term truce" is possible, because it still implies that confrontation can appear. You satisfy those who want peace, and you atleast keep those at bay who want Israel off the map...and ideally if things get better then you marginalize the latter, especially those within the Hamas organization itself. We must remember that Hamas began as a peaceful way to help Palestinians before its militant arm morphed into actively fighting and resisting Israel; the question is whether or not they can go back those roots....and despite the crap we have given Hamas for the past year, they have subtly indicated that they are willing but we need to pay attention to these signs ~ because when dealing with such a delicate issue the subtle signs are, quite frankly, the most important.
edit:
btw, I'm also unimpressed by this lack of honor in keeping a truce. One of the biggest and most emphatic points of Prophet Mohammed, and in the Quran - is that you honor truces or deals. It doesn't matter WHO it is with...so as long as the other party honors it, so must you.
So to see both sides do this is really disgusting. Despite the fact that most of you want Fatah to win, from an outsiders perspective I find them absolutely corrupt in some of the worst ways. Hamas, providing we walk CAREFULLY with them has more potential as we wean them towards us and away from Iranian elements
But of course we ourselves are prodding this conflict as even Israel is supporting Fatah.