I've heard an intersting theory about this. Israel pulls out all their settlers and by defacto helps create the nation of Palestine. That's bad you say. Depends on your point of view. Under international conventions like the Geneva Convention there are limits to how Israel can deal with the Palestinian terrorists because Israel is occupying part of the territory claimed as Palestine (as an occupying power Israel has certain obligations it's expected to abide by).
Israel pulls out and is no longer an occupying power, therefore it is no longer required to meet those obligations. If the terrorists want to continue their attacks, Israel will have the freedom to respond to them as full blown acts of war. Some terrorists fire a couple of rockets or mortar rounds into Israel, the Israelis get to respond with an all out artillery barrage if they feel justified.
The Palestinians better be careful what they wish for, they might just get it, and it might turn out to be something entirely different to what they were expecting.