The post-war Gaza plan is worth a try, but deradicalization programs and rebuilding efforts that involve other countries have mixed effectiveness, if we look at historical precedents. Also there should be a plan to get out of Gaza in the long term, or at least restore autonomy (like re-establishing the Palestinian Authority in the strip).
Israel could have done that 20 years ago but instead they chose to fund and enable Hamas to ensure that there was no unitary Palestinian government that they would have to negotiate a peace deal with.
Now it wouldn't work anyway because the Palestinian Authority has no public legitimacy at this point (in no small part because Israel continued building illegal settlements in the West Bank which the PA had no ability to stop).
Best bet at this point would be a (Muslim) third country stepping in to administer (not Egypt; not Jordan).
The Israelis did not fund Hamas, at least not in any conceivable interpretation of the notion during the timeline to which you are referring. I am perplexed as to why anti-Zionists constantly regurgitate this myth.
The Israelis did approve Qatari aid to Gaza, which was meant to be used for humanitarian purposes. It is well known that Hamas steals much of the aid that enters the Gaza Strip, but if anti-Zionist criticism of Israel for allowing the aid to enter Gaza were genuine, anti-Zionists would also oppose international funding to UNRWA - but they don't, so this argument is a pile of bollocks.
Also,
Israel did have peace negotiations with Fatah, even under Netanyahu, until
Fatah decided to make a coalition with Hamas to sabotage the negotiations.
After this occurred, Hamas started kidnapping Israeli teenagers and the rest, as they say, is history.
The main reason the PA has no public legitimacy isn't because of settlements (the demographics of which don't necessarily prevent the existence of a Palestinian state anyway - settlers are only 20% of the West Bank's population), but because
the Palestinian Authority has largely reduced security coordination with Israel allowing areas of the West Bank to become
hotbeds for militant groups funded by Iran, with the Palestinian Authority losing control of the area as a result.
Also, Israel tried to protect Palestinian Authority rule in Gaza by helping Fatah in the 2006 elections, because they knew a Hamas victory would mean the Palestinian Authority gets overthrown, which is what happened.
Most Muslim countries don't want to deal with Gaza and have been offloading the responsibility for Gaza on Israel for decades simply because it's convenient for them, but you might even be right - if the Muslim world took responsibility for the mess they have contributed to in Gaza this conflict would easily be more solvable.
