""As much of a pain in the arse Hamas is, without them Israel would have a totally free hand to do what it wants - more settlements, more incursions, more humiliation, more slaughter of civilians ""

That is an interesting perspective, and possibly a "failurs in logic" trap that good thinkers fall into. It is just as likely that Hamas provides most of the fuel to justify extreme actions by the Israel polititions and military, buffering the voices of the moderates within the Israel society.

The PLO once had a similar approach, which merged into a more moderate Fatah. Most progress towards peace and respectful co-existance likely came from moderates, not from extreme militants. It is likely that, at one point, militant activity by the PLO may have moved the Israeli center viewpoint a bit, stimulating more compromise from Israel due to international recognizition of the plight of the Palestinians. However, current militant activity from Hamas may be driven by another agenda from outside, and could have an opposite impact?