So what is Israel's policy towards Hamas?

The security cabinet's attempt to formulate an approach to deal with Hamas is positive. However, tensions exist between the goals the cabinet defined.
Israel's security cabinet met yesterday to discuss its response to the continued rocket fire and Hamas' strengthening in Gaza. Among the main defined goals were (Prime Minister's Office):
  1. Bringing the rocket fire to an end;
  2. Reducing the strengthening of Hamas, including incoordination with Egypt;
  3. Advancing negotiations with the Palestinian Authority;
  4. Striking at the Hamas regime in Gaza;
  5. Preventing a humanitarian crisis in Gaza to the extent the matter depends on Israel.

Although the attempt to formulate an approach to dealing with the Hamas challenge is positive, the dilemmas Hamas poses to Israel create tensions between these defined goals.

What is the price of preventing the rocket fire?

Ostensibly Israel could stop the rocket fire through a comprehensive ground operation or alternatively, through a ceasefire. However, the size of the force required to stop the rockets is likely to drag Israel back into renewing its control over Gaza's population. Attempts to achieve a ceasefire meanwhile may temporarily stop the rockets, but would allow Hamas to stabilize its rule and re-strengthen in preparation for the 'next round' of violence.

Pressure on Hamas undermines the political process

Abu Mazen's legitimacy to conduct negotiations with Israel is undermined during military operations in Gaza. Abu Mazen and several of his spokesmen threatened this week to halt negotiations if 'Israeli aggression' continues (Ramattan News Agency 6/3)

Impossible to strike at Hamas without harming the population

A report by Amnesty published today blamed Israel for causing what it described as the worst humanitarian crisis in Gaza since 1967.

Restrictions to an agreement with Egypt

The breach of the Rafah border crossing turned Hamas into a major player in any agreement over future border arrangements. Therefore, Israel and Egypt will find it difficult to implement any accord on Rafah without Hamas' agreement.

Furthermore, the greater Israel's military and political actions against Gaza from its border, the greater the expected pressure Egypt will feel from the Palestinian population along its border. In such a situation, Egyptian public opinion is likely to restrict the government's room to maneuver and with it, Egypt's ability to coordinate anti-Hamas measures with Israel.