You can't negotiate with a terrorist - even if they back down on the one issue another will be just around the corner. Unfortunately, the likes of Hamas and Al-Q maintain middle age grudges and avenge them with modern weapons. When somebody's stated aim is the anhilation of a country (Hamas on Israel) then how do you expect them to negotiate?
No, off with the head and as one previous post said - eventually a less able one will take it's place. It is just unfortunate that the rest of the word doesn't have the political boll0cks of Israel to fight fire with fire.