Israeli and Palestinian leaders are either incapable or unwilling to think strategically about ways they can resolve, or at least effectively manage, the many issues that have divided their people for more than sixty years. Short of complete annihilation of Hamas and thousands of civilians in the process, Israel’s ‘Operation Cast Lead’ in Gaza will not have achieved strategic outcomes that go beyond a breakable ceasefire. Israel’s goal of restoring deterrence by punishment will not last very long, as Hamas will find a way to eventually re-arm and re-engage in the same destructive behavior against Israel. At the same time, Hamas leaders will not be able to explain to Palestinians how shelling Israeli towns with rockets and terrorising Israeli society will better their lives and advance the cause for statehood. Negotiations between Israelis and Palestinians based on the 1967 boundaries seem almost futile today. What might have been achieved at Camp David in 2000, at Taba the following year, or in Geneva in 2003, is highly unlikely now.