As you know, Hamas (an Islamist political-military movement) currently exercise day-to-day control of the Gaza Strip region of Palestine (while the Israelis control its borders and airspace). From there, Hamas and other groups have been firing Qassam rockets across into Israeli border towns. As well as killing people and damaging property, this is causing great annoyance in Israel. Israeli forces have staged incursions and bombing raids into Gaza, killing many more people and destroying much more property than the rocket attacks; they have also run a blockade of the Gaza Strip, reducing the amount of foodstuffs and so on available to people there. The Israelis have, however, been unsuccessful at preventing the rockets from flying across the border.
Recently there has been some talk from Hamas of instituting either a hudna (truce) or a taddhiyya (period of calm, in which military operations would be downscaled) with the Israeli state. This would not be unprecedented, as Hamas has operated several such hudnas and taddhiyyas in the past. There was a slightly so-what quality to them in the longer term, as they failed to achieve any breakthrough in the political morass of Palestine-Israel; crucially, the Israeli state continued to assassinate Hamas activists and carry out offensive operations, and Hamas ceasefires would typically breakdown after the killing of a Hamas leader or the butchering of some Palestinian civilians who happened to be in the wrong place at the wrong time. From the Israeli side, the Hamas ceasefires seemed rather inconsequential, given that they did not cover other militant groups such as Islamic Jihad. Nor were they always strictly observed by Hamas cadres.
The current situation seems a bit different. The talk from Hamas of a ceasefire in Gaza was initially scoffed at by the Israeli establishment and taken as a sign that the movement was hurting as a result of Israeli military action. Then some government ministers broke ranks. Perhaps registering that military action was neither halting the Qassams nor securing the release of kidnapped Israeli soldier Gilad Shalit, some Israeli government ministers have suggested that a serious truce offer from Hamas should not be rejected. While these people are still placing hoops for Hamas to jump through, they are talking about concrete issues rather than the symbolic demands on which the Israeli state is traditionally fixated. It is perhaps also significant that the politicians talking about engagement with Hamas are from the mainstream of Israeli politics and not its pacifist fringes; Shaul Mofaz is from the Kadima party of Ariel Sharon and current prime minister Ehud Olmert, while Binyamin Ben-Eliezer is from the hard-nut end of Labour.
For the moment, all this talk about truces and engagement with Hamas is just talk. Israel's prime minister, Ehud Olmert, has rejected any kind of engagement with Hamas unless the movement formally recognises Israel, something the movement is unlikely to ever do. The military campaign against Hamas will continue indefinitely, whether Hamas declares a truce or not. Perhaps not entirely coincidentally, another Israeli government minister announced the expansion of Israeli settlements in Palestinian East Jerusalem. So maybe we are in for more of the same next year, or maybe the public position of Mofaz and Ben-Eliezer suggests that there are subterranaean movemens taking place within the Israeli body politic.