And in a Race to the Right

Both Tzipi Livni and Benjamin Netanyahu are promising to take down the Hamas government in Gaza.

It's an attempt by Livni to position herself to the right of Natanyahu for the election it is stupid, since it serves to reinforce support for Hamas.

In terms of government entities in the disputed territories, Israel faces Morton's Fork, with Hamas actually able and willing to perform the role of governance while being unwilling to acknowledge Israel as a country, and the PA (and Fatah in particular) being unable to do any of that, because their focus continues to be corruption and self dealing while paying lip service (when not speaking in Arabic) to Israel's existence.

I don't know of a solution here.