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It seems to me that your central point is:
the only way to resolve this once and for all is to arrive at peace solution
Well, yeah. Only wackos (on both sides) see things differently. But aren't you forgetting a few small facts?
1. Israel's peace treaty with Egypt
Israel gave back a huge amount of territory which had been used as an invasion path to Israel - twice - to Nazi-buddy Sadat, who had been willing to sacrifice a million Egyptians to conquer Israel. Israel took a big chance on him, giving back all that land in exchange for a peace of paper. And look what happened. Who killed him?
2. Israel's peace treaty with Jordan
Not as big a deal as Egypt, but still, it proved again that Israel could and would make peace with Arab states.
3. Israel's ongoing peace negotiations with Syria
I'm not sure these are a good idea, but it further answers your question about the mainstream in Israel being willing to make peace, notwithstanding the risks involved.
4. Israel's ongoing peace negotiations with the PA
Nobody knows where these are going, but the fact is they were taking place, until it became impossible to live next to Hamas.
So, Malkatraz, in view of these facts, I'd say your position is pretty weak. For 60+ years, Israel has consistently been ready to make peace with the Arabs.
Now, I'd like to turn the tables on you. Prove to me that Hamas is willing to make peace with Israel.