Israel's Olmert takes on West Bank outposts is the title of the linked Christian Science Monitor article by Ilene Prusher.
For a long time, neither Labor nor Likud really tackled the settlements issue. Amona, the settlement discussed in the article, and recently dismantled by the Olmert government, over riots where 100s of Israelis were injured (incl. horseback riding baton weilding cops and cinder block throwing rioters) was one of the worst.
Sometimes politics is pragmatic, which means that not every West Bank settlement of Israelis will necessarily be handed over to the Palis. Too bad the Jews think that dirt is holy, eh? I tell you, very little of it is very nice to live on.
Anyway, to make up for being a sound politician, the Olmert government has decided to stop giving the Palestinian Authority its share of tax revenue. It claims that Hamas is against the Oslo Accords, and that's when the tax transfer system was set up. I'd wish that the Israeli government would instead take the position that... until Hamas does something, as the government, to renounce Oslo, the transfers should be maintained.
At worst, Olmert should make the steps required by Hamas to return to the system _crystal_fucking_clear_, so no one in Gaza or the West Bank thinks that Israel is double dealing with them. If Hamas "officially" embraces Oslo (which created the Palestinian Authority government in which they now have a majority) and Israel says "Oh, but that was insufficient" expect the worst.