Hamas refuses to renounce its calls for the destruction of Israel and death to Jews everywhere. Hamas does recognize that Israel is much more powerful militarily, and fighting Israel right now is counterproductive. But Hamas also recognizes that it has a major asset in European support. Many Europeans, especially journalists, are convinced that Israelis are the New Nazis, and are oppressing the Palestinians. Many UN officials agree with this interpretation of history. To these revisionists, the Palestinian terrorism is seen as justified self-defense. The Hamas calls for Israel's destruction are seen as justifiable rage at Israel's oppression.
European government don't quite see it this way, although Israel, more so than the Palestinians, are held responsible for the mess. The Israelis are seen a civilized, in the Western sense, while Hamas is seen as Islamic fanatics with a tenuous hold on reality. It's a mess.
The list of conflicting demands, that prevent an Israeli-Palestinian peace deal, is long. Some, like the Hamas call for the destruction of Israel, are absolute deal breakers. No getting past that one. All Hamas will agree to is a ceasefire, and only one that allows them free access to the outside world (so they can bring in more weapons with which to attack Israel.) In turn, Israel won't agree to any peace deal that does not guarantee a halt in weapons being smuggled into Gaza, especially longer range rockets that are fired into Israel.
Egypt is not enthusiastic about shutting down the tunnels. The smuggling operation generates lots of cash that ends up in the pockets of Egyptian officials and local merchants. Moreover, tolerating the smuggling provides Egypt with temporary protection from Hamas providing sanctuary for anti-Egyptian Islamic terrorists. The peace negotiations have basically come down to how large a bribe will the West provide Egypt to cooperate with shutting down the tunnels. This can be done by buying up many properties on the Egyptian side of the Gaza border, tearing them down, and installing an extensive network of seismic sensors to detect tunneling activity. Then the Egyptians have to go after the operators on the Egyptian side, make arrests and prosecute, in addition to destroying the tunnels. Egypt wants a lot of cash before they will go through with all that, and they don't want it to look like a bribe.
Meanwhile, Hamas is giving out Iranian and Gulf Arab cash to Gazans who were injured or had their homes damaged. This is often done with journalists present, to gain maximum propaganda effect. Hamas wants to maintain the myth that the recent fighting with Israel was mainly an Israeli attack on Gaza civilians. In reality, the Israelis only went after Hamas members, but Hamas tries to ignore that, and the fact that Hamas fighters put up very little resistance and used Gaza civilians as human shields.
The Israeli army reported that its troops, who had crossed into Gaza after yesterdays attack, had killed one of the men responsible for the roadside bombing, and were after others involved.
January 27, 2009: Palestinian terrorists set off a roadside bomb on the Gaza border with Israel, killing an Israeli soldier, and wounding three others. One Palestinian was killed when the Israelis returned fire. No group took responsibility, but all the terrorist groups in Gaza praised the attack. Hamas denied responsibility, but Israel told Hamas that it was responsible for whatever happened inside Gaza. Israeli aircraft resumed bombing the Egyptian border, destroying more tunnels, and efforts by smugglers to repair tunnels damaged earlier in the month. Israel also told Hamas that it's leaders were not safe as long as they continued to hold an Israeli soldier captive. Most Hamas leaders have stayed hidden since the ceasefire.
Syrian diplomats admitted that, as soon as the fighting with Hamas began last month, Israel passed a message to Syria and Lebanon. If there were any Hezbollah rocket attacks on northern Israel, valuable Syrian and Lebanese targets would be destroyed. As a result, Lebanon and Syria leaned on Hezbollah to restrain itself. Even with the operations in Gaza, there were plenty of Israeli bombers available to hit Syrian and Lebanese targets with smart bombs. Such weapons can do expensive damage to bridges, power plants, factories and government buildings, in a very short time. It would take the two countries years, and billions of dollars, to repair the damage.