What do do with Hamas? Show them who's boss. If they really are there to provide leadership for the Palestinians, then now that they've consolidated power there, let them do something. If the attacks continue, cut off gas and then electricity.
With Hamas now clearly in charge, Israel should declare that it will tolerate no more rocket fire -- that the next Qassam will be answered with a cutoff of gasoline shipments. This should bring road traffic in Gaza to a halt within days and make it increasingly difficult to ferry around missiles and launchers.
If that fails to concentrate the mind, the next step should be to cut off electricity. When the world wails, Israel should ask, what other country on Earth is expected to supply the very means for a declared enemy to attack it?
What Krauthammer fails to mention - though I'm sure he knows - is that no matter what Israel does they're always blamed. But at least it's a plan that deserves thought.
I also found this interesting: "Historian Michael Oren points out that the Palestinian Authority has received more per capita aid than did Europe under the Marshall Plan." If true, than that's pretty telling of the political situation in Gaza. If there are still Hamas supporters out there, I think it's time for them to wake up.