@cicerone imposter,
The only reason Hamas is designated a terrorist organisation is because Israel calls the shots. Hamas is an organisation with limited territorial ambition that poses absolutely no threat to America or the US, and it is an organisation that can be dealt with. When a BBC journalist was kidnapped by The Palestinian Army Of Islam, Hamas rescued him.
http://en.wikipedia.org/wiki/Kidnapping_of_Alan_Johnston
In the early days Hamas received funding from Israel because they wanted to weaken the mainly secular and nationalist Fatah. It was only later that they realised their mistake. This is typical of the West's approach to the ME and Islam in general. Not only has there been lopsided support for Israel, but really nasty dictators have been supported just as long as they were pro western in their outlook. All moderate, democratic voices, (the people we should be supporting) were quashed. The result being that the only consistent opposition to Western hegemony was radical Islam, and the more the West stamped on secular democrats, the more extreme and powerful these organisations became.
That has ended up with ISIS, (who even Al Qaida believe are too extreme,) taking control over parts of Iraq and Syria. Until moderates are rewarded this cycle will continue. Throughout Mahmoud Abbas' presidency illegal settlement building has actually increased, and the daily persecution of the Palestinians in the West Bank has got a lot worse. His negotiations with Hamas to make sure the Palestinian people speak with one voice are used as an excuse by Israel to continue building illegal settlements and to avoid talks.
This conflict began with the kidnapping and murder of three Israeli students. Israel's response was typically heavy handed, many Palestinians were killed in the so called "investigation." This "investigation" was a sham, Israel wasn't interested in finding out who the perpetrators were, they blamed Hamas and attacked Hamas' leadership. Most impartial commentators thought that seeing how Hamas had just entered a partnership with Fatah, it was highly unlikely to be them. It was more likely to be one of the more extreme groups, (of which there are many) like Islamic Jihad, The Palestinian Army Of Islam or an even more extreme organisation.
So what is the ordinary Palestinian to think? Despite "negotiations," and a moderate president the occupation continues, and actually gets worse. A hard line organisation like Hamas despite offering cease fires and talks is at best ignored, or bombed the crap out of. They look over to Syria and see the success of ISIS. It's logical to assume that the only way they can get self determination is to take a leaf out of ISIS' book and embrace full blown radical Islam.
Bottom line, Israel would not negotiate meaningfully with Fatah and they got Hamas. If they don't negotiate with Hamas they're going to have to deal with a body far more extreme. That will kick off across the ME and come back to haunt us in the West.