The answer, I fear, is that the specter of Hamas's growing power always worked nicely for the Likud. And there is an analogy here to congressional Republicans:
If you are the party of laissez-faire and American plutocracy, you cannot say so. There is no majority for this. So you say, rather, that you are simply living with no illusions, being tough-minded, the party of government-is-the-problem. Then you resist or sabotage every government program or presidential initiative, people start saying “Washington is broken,” and you, of all people, seem vindicated—for American politicians, the Big Con, perfectly executed.
The same is true of the Likud, which benefits incrementally from the Occupation. Netanyahu’s government can’t just say it is committed to Greater Israel, theocracy-lite, and settlers—there is no majority for this. It merely claims to be tough-minded, not naive--as Avigdor Leiberman says, "bli ashlayot"--the government of we-have-no-partner. And this leaves in place a condition of spreading settlement, and army repression (to "keep the peace"), that is bound to produce periodic eruptions of violence and movements like Hamas (which. by the way, didn’t emerge before the first Intifada in 1987). The violence and the movement prove that we have no partner.
In either case, the strategy is not to spread ideology but sow cynicism. It works the same in every country.