Israel had the opportunity to do that from 1967 until the Unilateral Disengagement in 2005—nearly forty years—and did not do so.
If Israel had really been that bothered by textbooks that reprinted Protocols of the Elders of Zion propaganda, they'd have given them textbooks that didn't say those things instead of forcing Palestinians to rely on Saudi Arabia, Pakistan and other sources for funding, curriculum and materials.
This didn't happen because Israel's preferred option was for there to be antisemitic canards in schoolbooks so that they could complain about the antisemitic canards in schoolbooks and cite them as another excuse for why they can't be expected to come to the negotiating table.
Do you actually believe that Israel encouraged Palestinian children to believe that Jews did 9/11, because they wanted Palestinian children to grow up hating them, so they could use that as an excuse not to come to the negotiating table (which they did come to on numerous occasions over the time period you describe)? Like seriously, the lengths people have to go to twist themselves in knots to come up with an anti-Israel position. Israeli textbooks don't teach their kids that Palestinians invented genital herpes or whatever. Like this absurd, ridiculous, intentionally-manufactured hate only ever goes in one direction.
Why did Israel keep giving money to Hamas all through that time period?
Because if they didn't subsidize the elected government of Gaza people like you would say "Israel is starving the Palestinian people"
