<<The Israelis tried running Gaza too, and it didn't work. They were forced out by political pressures from within and without.>>
Actually, XO, they were forced out by money pressures, just as they were forced out of South Lebanon. They simply couldn't afford the cost of occupying all those areas. Gaza in particular had only 8,000 Jewish settlers in a sea of a million Arabs, so it made more sense to pay off the settlers and "get out of Dodge."
I agree with the rest of your post, though. Egypt doesn't want the responsibility or the radicalism and the Palestinians don't want the chance to experience Mubarak's torture chambers.
Gaza, the rockets, and the dilemma seem to be emblematic of Israel's future problems, though. A land which costs too much to occupy, a people which can't be exterminated, a technology (rocketry) which can only grow more effective over time - - - geeze, what is the end result when the people of the West Bank are finally reduced to the misery of the Gazans? Lotsa rockets, an occupation which costs more than it delivers . . . at some point, Israelis may have to say to the West Bank settlers, "Folks, you're on your own from here on in. We're pulling out in six months. Come back to Israel with us, otherwise have a nice life with your Arab neighbours."