I really don't know what the solution is in that part of the world, but I do know that bombing each other isn't working.
It strikes me that Israel's response to the rockets being lobbed out of the Gaza is (once again) completely out of proportion to the damage the rockets seem to be doing. Okay, I understand that there is a very human, visceral need to step on those that are causing the problem, but for crying out loud people, it hasn't worked once in the fifty odd years that Israel has been a nation on the world's maps - what makes anyone think it will make a difference this time?
Unfortunately, I think that Israel finds itself in a 'got the tiger by the tail' scenario. They have tried to isolate the Palestinians from each other, and from the greater bulk of Israel with a combination of walls, and checkpoints. On both sides, the isolation breeds both alienation and resentment.
It will take a meeting of the minds between two serious statesmen to broker a meaningful peace in that region - if such a thing is possible at all.