I seldom agree with Michael Freund, but he's pretty much spot-on about what Israel needs to do now.  Except the rebuilding the settlements.
 
The time has come to stop fleeing and to face this threat head-on.

Indeed, thanks to the blundering of successive Israeli leaders, what was once just a thorny counterinsurgency problem has now become a full-blown strategic threat, as the rise of Hamastan before our very eyes makes abundantly clear.

 
The existence of a rogue, Taliban-style terrorist state along Israel's southern border is a recipe for disaster. If allowed to come to pass, the consequences will be felt far beyond the outskirts of Sderot and Ashkelon. Gaza will serve as a regional launching pad for terrorism, trouble and tribulation, and it will tempt the rest of our neighbors to think that the "liberation of Palestine" is near.
 

Of course it's not going to happen and things will only get worse.