I think the Palestinians should disband all groups like Hamas and Hezbollah, then request the United Nations establish a peacekeeping/law enforcement force in their territories responsible for suppressing any excuse Israel might have for seeking revenge including searching out rockets and destroying tunnels.
A secondary UN group would be responsible for managing all aide to Palestine to insure it goes to the people. Only be removing the ability to threaten Israel and providing UN peacekeepers to ensure Israel respects the new pacified Palestine can the economic development occur that will make the Palestinian territories viable economies and through that lay the groundwork for the two-state solution.
The only way to stop the practice of using terrorist acts to solicit reprisals where children are used as human shields is to suppress the ability to launch terrorist attacks in the first place.
In addition, we must track the funding of terrorism and begin to act against those nations that actively support the practice. In the end, the "bankers" of terrorism are as guilty as those that commit the acts.