I don't think Israel even wants to occupy Gaza; it would just create a headache, with no benefits. I agree that this campaign/or whatever you want to call it, isn't going to solve the big problem.
They will not be able to solve the underlying problem alone though. As long as the international community keeps letting the Palestinians get away with terrorist attacks, Israel will keep retaliating. And even if the Israelis stopped, the terrorists won't.
If the Palestinians want to end it, they'll take a hard line against the terrorists. An extremely hard line.