I don't know about the "It was a splinter group we can't control" dodge. They used it for years under Arafat, until in 1993 they decided briefly to appear to deal, then suddenly they could control the splinter groups. It became clear after a while that the "splinter groups" were being created ad hoc for each terrorist operation to shield the PLO. It was a political ploy to provide a fig leaf for the PLO, now for the PA and Hamas, to continue to receive UN and EU money.
You are however quite right about the Palestinians being unable to even agree to tolerate the existence of Israel, let alone surrender to her. I fear the only solution, until they collectively have a change of heart, is for them to live behind walls away from other people and to be kept away from weapons and sharp objects. The walls are being built and the IDF is currently doing what it can to prevent the use of sharp objects. Gaza is a mental asylum for the pathologically xenophobic and assaultive.