I agree in principle, but honestly this is pretty low on the list of things that Israel does that helps build the next wave of Palestinian militants. The blockade of the Gaza Strip, for example - whatever you think of its merits - has had a fairly harsh effect on average people living there, and has been a effective tool in keeping the support for Hamas high. It's let up somewhat recently, though it'll be interesting to see what happens with the ongoing political turmoil in Egypt.
Gaza strip borders Egypt on the southwest (11 km) and Israel on the east and north (51 km (32 mi))[1]. Israel can only "blockade" it's borders. The border to Egypt is open, and that where the rockets come from. The strip was occupied too long, true (38 years), but once Israel pulled you would expect something better than a fundamentalist militant Islamic regim that is focused on terror rather then encouraging better life after the occupation. One can hardly call "free from occupation" the Palestinians who live under this Islamic brutal oppression.
