The Israelis should fight back with trigonometry.
Specifically with unmanned surveillance balloons they could have extensive real time observation of the vast majority of the Strip.
And then they could use even more trigonometry, when they detect Paleos setting up mortar and rocket positions, to stick artillery rounds in their ear before they can even launch.
I would go a step further with a bit of wit. In that the Paleos have no problem with using human shields to protect their launch sites, the Israelis could respond by crafting air burst artillery rounds that contain high expansion anti-riot “sticky foam”.
http://en.wikipedia.org/wiki/Sticky_foam
Sticky foam is a goo that when it lands on people or objects becomes a very gummy, sticky substance that soon hardens and is a major pain to remove. A relatively small amount of it can immobilize a person, and getting it off equipment, in this case mortars and rocket tubes, is several hours of hard work. And if they try to fire that weapon, the round will blow up in the tube.
Isn't it about the same is this stuff? It takes several days to get it off your fingers.