Some excerpts:

A look at Israel’s decades-long dealings with Palestinian radicals – including some little-known attempts to cooperate with the Islamists – reveals a catalog of unintended and often perilous consequences. Time and again, Israel’s efforts to find a pliant Palestinian partner that is both credible with Palestinians and willing to eschew violence, have backfired. Would-be partners have turned into foes or lost the support of their people.

In Gaza, Israel hunted down members of Fatah and other secular PLO factions, but it dropped harsh restrictions imposed on Islamic activists by the territory’s previous Egyptian rulers. Fatah, set up in 1964, was the backbone of the PLO, which was responsible for hijackings, bombings and other violence against Israel.

The Muslim Brotherhood, led in Gaza by Sheikh Yassin, was free to spread its message openly. In addition to launching various charity projects, Sheikh Yassin collected money to reprint the writings of Sayyid Qutb, an Egyptian member of the Brotherhood who, before his execution by President Nasser, advocated global jihad

Instead, Israel’s military-led administration in Gaza looked favorably on the paraplegic cleric, who set up a wide network of schools, clinics, a library and kindergartens. Sheikh Yassin formed the Islamist group Mujama al-Islamiya, which was officially recognized by Israel as a charity and then, in 1979, as an association. Israel also endorsed the establishment of the Islamic University of Gaza, which it now regards as a hotbed of militancy. The university was one of the first targets hit by Israeli warplanes in the recent war.

Brig. General Yosef Kastel, Gaza’s Israeli governor at the time, is too ill to comment, says his wife. But Brig. Gen. Yitzhak Segev, who took over as governor in Gaza in late 1979, says he had no illusions about Sheikh Yassin’s long-term intentions or the perils of political Islam. As Israel’s former military attache in Iran, he’d watched Islamic fervor topple the Shah. However, in Gaza, says Mr. Segev, “our main enemy was Fatah,” and the cleric “was still 100% peaceful” towards Israel.

In fact, the cleric and Israel had a shared enemy: secular Palestinian activists. After a failed attempt in Gaza to oust secularists from leadership of the Palestinian Red Crescent, the Muslim version of the Red Cross, Mujama staged a violent demonstration, storming the Red Crescent building. Islamists also attacked shops selling liquor and cinemas. The Israeli military mostly stood on the sidelines.

Mr. Harari, the military intelligence officer, says this and other warnings were ignored. But, he says, the reason for this was neglect, not a desire to fortify the Islamists: “Israel never financed Hamas. Israel never armed Hamas.”