More than 127 Palestinians including women and children have been killed and 940 injured by Israeli airstrikes since Israel began a massive attack on political and civilian targets in Gaza. The Israeli Government's pretext is the killing of the three Israeli settlers. Even though Hamas and other groups denied any link to the incident, Prime Minister Benjamin Netanyahu is using it as an excuse to attack Gaza again.Israel's escalation of violence might be seen as a tactical gain for Mr. Netanyahu but it is a strategic defeat for Israel and the peace process.Netanyahu's real goal is to destroy the Palestinian unity government and undermine the future Palestinian state. Over the last two years, Netanyahu has failed on two key issues of his foreign policy agenda: stopping the West from holding negotiations with Iran and convincing the world that Palestinians are no partner for peace and should be kept under occupation.Despite Netanyahu's messianic messages about the dangers of Iran, Europeans and Americans have rightly chosen the path of diplomacy to resolve the dispute over Iran's nuclear program. Iran as Netanyahu's demonic other has served him well in domestic politics and the U.S. Congress but isolated him on the global stage. His failure to convince even the U.S. Government over the Iranian nuclear negotiations is another sign of Israel's loss of credibility and increasing isolation in the eyes of its Western allies.Netanyahu also failed to get his Western allies on his side on the Palestinian national unity government. He claims that since the unity government includes members of Hamas, he cannot talk to them. But this argument defies logic. How can Palestinians have a unity government when it excludes half of Palestine? When convenient, Mr. Netanyahu complains of not having a united Palestine for peace talks. When the talks get serious and the Palestinians reach unity, he and his coalition partners do everything to destroy their Palestinian partners.Luckily, Europeans, Americans and Arabs have pledged to work with the new Palestinian government. Instead, the Netenyahu Government began to take punitive measures including a tightening of border crossings in the West Bank and Gaza and the withholding of taxes it collects on behalf of the Palestinian Authority. Netanyahu even accused Mahmud Abbas of saying "yes to terror, and no to peace" for talking to Hamas. The brutal killing and beating of scores of Palestinian civilians over the last ten days shows who is really saying yes to terror and no to peace.With the killing of three Israeli settlers, a convenient excuse has been found to attack Gaza, force Hamas into retaliatory action and destroy the prospects of a functioning government and national elections. This works well for Netanyahu because he does not believe in the two-state solution but cannot say it publicly. Instead, he creates "facts on the ground", the never-ending Israeli tactic to derail the peace talks, expand the settlements, deepen the occupation and blame the victim.The problem is not the Palestinians or the inclusion of Hamas in the unity government. The problem is Israel's refusal to admit the fact that it has occupied a nation for more than half a century. As an occupier state, Israel refuses to withdraw to the 1967 borders despite the U.N. Resolution 242, which calls on Israel to withdraw from all Palestinian lands. Far from treating Palestinians as equal human beings, Israeli policies continue to demonize them in order to justify its occupation of their lands.The Palestine question is not just about land or security. It is about justice. It is about human dignity or lack thereof in the Palestinian lands.It is about living under the constant fear of the next Israeli airstrike. It is about the humiliation and frustration of living under occupation for so long and seeing the world turning a blind eye to your suffering. It is a sense of despair and revolt that finds a tragic yet human expression in the cry of Suha Abu Khudair, the mother Muhammad Abu Khudair who was burnt by Israeli settlers last week: "Are we not human like them?"The Israelis claim that this is all about security is simply false. As Avi Shlaim stated after the Gaza war of 2008, "the Israeli occupation of the West Bank and the Gaza Strip in the aftermath of the June 1967 war had very little to do with security and everything to do with territorial expansionism. The aim was to establish Greater Israel through permanent political, economic and military control over the Palestinian territories. And the result has been one of the most prolonged and brutal military occupations of modern times."Occupation lies at the heart of the problem in the Israeli-Palestinian conflict. Deepening the occupation might bring short-term gains to Mr. Netanhayu and his government but it is a strategic loss for those who really believe in peace and justice.