The IDF shouldn't occupy interior Palestinean cities, even terror nests. Israel does not need to occupy more "islands" in a hostile sea.
Instead, Israel should announce the following policy: after each new terror attack, the IDF will take and hold a 1K wide strip on the PA side of the Green Line. It may be wider or narrower in specific locations as suits the terrain. Push all the muslims eastward out of this 1K strip into the rest of the PA, let Arafat feed and house them.
Turn the 1K strip into a cordon sanitaire, a free fire zone which is as good as the billion dollar mega wall at preventing infiltration, and has the benefit of being moveable eastward as needed. Any non IDF seen in the 1K strip are to be fired upon immediately.
Bulldoze every structure in the 1K strip and truck away the rubble. Leave not one house for the Palestineans to demand to return to. Tell them "you have no house here, this land is lost to you forever. Thank Hamas, Hizbollah and Islamic Jihad for the loss of your land."
After each new attack, move the cordon sanitaire strip 1K eastward, and permit Israelis to settle the now fallow land previously taken.
Eventually the Palestineans will either revolt against their terrorist organizations, or they will find themselves all in refugee camps in a few tiny patches right against the Jordan River.
(The giant billion dollar wall now being built is a mistake: it grants permanent control over the land on the other side to the Palestineans, no matter what future terrorist atrocities they commit. They need to lose "land for terror", and the billion dollar wall cannot move.)