The first is an absolute cease-fire. Previous cease-fires allowed Hamas to launch two or three rockets a week into Israel and to smuggle weapons into Gaza through tunnels. To obtain a cease-fire now, the international community should recognize Israel's right to respond to any aggression over its international border and monitor the closure of Hamas' weapons-smuggling tunnels.
Above all, the goal is to ensure that Hamas is unable to proclaim victory and thereby enhance Iranian prestige in the Arab world.
The trouble with apocalyptic movements like Hamas is that they will proclaim victory regardless, no? Hamas will only be defeated by the Palestinians, in the end. Which is why Kramer's notion of pitting the PA against Hamas makes more sense. But the idea that this time, pure violence and enforcement of a blockade will force a change of heart among Palestinians and Arabs more generally seems utopian to me. The risk is that this could ignite pro-Iranian Jihadism across the region.
A couple of thoughts:
The one big problem with closing the weapons-smuggling tunnels is that they are also the food-and-supplies-smuggling tunnels. The tunnels have played an important role in keeping Gaza afloat, from a humanitarian perspective, under Israel's economic embargo.
The tunnels existed in some form before this particular depressing situation occurred, since (as I understand it) Israel has not allowed Gaza's economy to operate freely across borders in decades. I read at least once, I believe in the 2008 Crisis Group Report on Gaza, that tunnel smuggling began because cheese was cheaper in Egypt (the tunnels are primarily under the Gazan-Egyptian border). When Israel created the embargo after Hamas's 2006 victory, activity increased; when the embargo was intensified after Hamas violently took over the Strip, Hamas took over and expanded the tunnels as a way to generate revenue (they instituted taxes on particular goods) and maintain the role they have played since before their electoral victory as a provider to the people of necessary goods and services.
Furthermore, Gazans have come up with other methods of smuggling and I don't doubt they'd find a way to get weapons in without the tunnels. (I remember a story of a Gazan trader smuggling powdered cement--cement is not allowed into Gaza under the siege--disguised as flour.) Smuggling, via the tunnels and otherwise, has proven extremely difficult to stop or police. The only solution is to eliminate the need for smuggling, since many of the items smuggled are quite necessary for civilized life (cement, medical supplies, spare parts, food, whatever) and demand for them is not going anywhere. This means that Israel will have to lift the embargo if it wants better control of weapons going into Gaza, through closing the tunnels and other means.
Ironically, part of Hamas's domination of the tunnel economy was an effort to control weapons' entry into Gaza and their dispersal within the territory--another move by the organization was to institute rules making it illegal to sell weapons or carry them in public. If Hamas had been more successful in this effort, it would have been better able to control groups like Islamic Jihad that also fire rockets at Israel--with or without Hamas's permission--and that see Hamas as having sold out and moderated too much (hard to believe, but there it is) since rising to power, and Israel could arguably have seen fewer rockets into its territory since these groups could have been neutralized or at least controlled. Hamas's ability to control these groups has never been very strong, and part of their argument for including lifting the embargo as a condition for ceasefire was that they would never be able to get these organizations to respect one without the kind of political capital that that promise would give them.
For both of these reasons, then, the ceasefire that Yossi Klein Halevi and Michael B. Oren call for in the quotation probably will not happen, and certainly will not be effective, without lifting the embargo. This would be the smart thing to do anyway, as all the siege does is make Gazans more dependent on Hamas for their livelihoods, give Hamas an easy scapegoat for anything that goes wrong on its watch, and make Israel look mean. I think the current offensive may actually provide an opportunity to do so: when Israel decides to end this round of warfare, it can pull out and then, perhaps, lift the embargo while looking generous and measured rather than weak. Indeed, it could even look like a sign of confidence in their victory.
With regard to "pro-Iranian jihadism", I don't have comprehensive empirical knowledge to offer, but I can tell you that Iran is hardly universally popular in the region. It is seen by what I believe to be a decent chunk of Arabs as meddling in other countries' business and politics and as a general promoter of chaos and instability. Reasonably, they're not fans of that. I was talking to an Egyptian friend yesterday about this and he feels exactly this way.
Furthermore, Iran is not the automatic ally of all Shi'ites in the region--their puppetmaster image and their Persian ethnicity can and do set them apart. Shi'ite militias in Iraq, for example (including the Badr brigades) don't like the idea of Iran meddling with them and have disparagingly referred to each other as "Persians" or lackeys to Tehran.
On a practical note, jihad (which I take to mean terror in Sullivan's usage) as practiced by non-state actors is much easier to mobilize in response to visible suffering like Gaza's current situation than in response to a diminution of political capital. Yes, Iran could be struck a blow here, but it's hard to see that blow as an effective rallying cry for terrorist recruitment. Established organizations like Hizballah or Al Qaeda (though AQ is highly unlikely to engage on Iran's behalf) that more easily practice a broader political agenda are better positioned for this, but the advantage is that such organizations are known quantities that can be attacked with rhetoric and military force.
When it comes to Iran's traditional allies, Hizballah would certainly be very unhappy; in light of the recent backroom negotiations between Syria and Israel over the Golan, Syria is a bit of a wild card here. However, if, in this scenario, Israel had just lifted the embargo, it would be better positioned politically to denounce any repercussions against it by these or other actors and to strike back forcefully against any aggression. Going back to the difficulty of mobilizing around what I think would be a fairly abstract political point, it's true that aggression as retaliation for Israel's invasion of Palestine could be an effective rallying cry, but Arab rhetoric about abuses toward Palestinians would be deflated by a lifting of the embargo. It would make little sense to strike Israel on Gazans' behalf after Israel had taken such a positive action toward Gaza, and the international community would, I think, have little sympathy.
Which doesn't mean no one would do it. We've seen people do stupid things in this conflict for decades. It just means that if someone did, it would likely be a fairly limited phenomenon, not a wave "across the region," and Israel would have a much better chance of looking like the good guy as well as better cover for dealing with it forcefully.