Since Annapolis, and with GW's upcoming visit to Israel, many on Europe's and Israel's left are beginning to drool at the mouth again regarding the possibility of a negotiated settlement with the Palestinians. The favorite scapegoats being blamed for the peace messiah not coming include the usual parade: the settlers, Bibi, Olmert, and the religious. We're seeing headlines in Ha'aretz of "progress" in the meetings between Livni and Palestinian officials, reports of an impending prisoner exchange (despite Haaretz's abysmal history of grossly inaccurate reporting on this numerous times in the past), and of the "strengthening" of the Fatah moderates. According to these pundits, the only things interfering with diplomatic progress towards an agreement are settlements and the lack of Israeli "gestures" to the Palestinians.
As I have explained on a previous post, for several reasons there is no chance of an agreement in the foreseeable future. Even though Olmert and other western leaders know this, they cannot come out and say this openly. Instead, for political reasons, they must maintain the illusion of diplomatic activity, to satisfy their constituents and the Europeans. At the same time they must manage the conflict diplomatically and militarily, keeping it on low flame and out of the headlines.
I think that this explains Israel's approach in dealing with Gaza and the Kassam problem. The only other alternative is a massive invasion and prolonged occupation of the strip, with all that this entails. Of course such an invasion doesn't guarantee the stopping of Kassams (it didn't when we were in Gaza), and the military and diplomatic costs would be very high, perhaps not justifying any benefits gained. I think that both sides are playing a game by certain unwritten rules that both can realistically "live" with, until such time that one side, either intentionally or unintentionally, breaks them. At the same time Israel needs to continue work at a furious pace towards the development of an effective anti-rocket system.