"Politically speaking, Islamic fundamentalists were sometimes regarded as useful to Israel, because they had conflicts with the secular supporters of the PLO. Violence between the two groups erupted occasionally on West Bank university campuses. Israeli military governor of the Gaza Strip, Brigadier General Yitzhak Segev, once told me how he had financed the Islamic movement as a counterweight to the PLO and the Communists. 'The Israeli Government gave me a budget and the military government gives to the mosques,' he said." - New York Times David Shipler cites the Israeli military governor of Gaza as boasting that Israel expressly financed the fundamentalists against the PLO "In the wake of the 1967 war, & Israel's occupation of Gaza & the West Bank, the Islamists flourished with support from both Israel & Jordan...” "In 1965, Yassin was arrested by Egyptian intelligence in one of Nasser's crackdowns.After 1967, with Israel in control of the West Bank & Gaza, things changed. Yassin was freed..Soon Israel would begin to see Yassin & the Muslim Brotherhood as valuable allies against the PLO.” "Israel's formal support for the Islamists occurred after 1977... In 1978, [Israeli prime minister] Begin's new government formally licensed Ahmed Yassin's Islamic Association. It was part of a full-court press against the PLO..” "[The] Israeli military governor of Gaza [was quoted] as boasting that Israel expressly financed the Islamists against the PLO: 'Politically speaking, Islamic fundamentalists were sometimes regarded as useful to Israel, because they had conflicts with the secular supporters of the PLO. US diplomats & CIA officials were aware that Israel was fostering Islamism in the occupied territories. 'We saw Israel cultivate Islam as a counterweight to Palestinian nationalism,' says Martha Kessler, a senior analyst for the CIA..” "In the early 1980s Israel supported the Islamists on several fronts. It was, of course, supporting the Gaza & West Bank Islamists that, in 1987, would found Hamas...” "Not everyone in Israel was happy with the policy of collaborating with Islamists... It was primarily Israel's far right--Begin, Prime Minister Yitzhak Shamir, & Defense Minister Ariel Sharon--who pursued this policy most aggressively...” "The Israelis, most of them, were secularists, too, & they thought these religious terrorists were a flash in the plan. They were trying to defeat Arab nationalism using Muslim zealots." [Note: This was a wider policy of the US & UK as well.]” "Victor Ostrovsky, a former Mossad officer who left the agency & became a strong critic... [wrote,] 'right-wing elements in the Mossad,' feared that the popularity of Egypt's president... might force Israel to give up territories that it wanted to hold on to, so they backed fundamentalist Egyptian groups 'under false flags,'... Ostrovsky leveled charges that the Israeli right deliberately fostered Islamic fundamentalism among the Palestinians: 'Supporting the radical elements of Muslim fundamentalism sat well with with Mossad's general plan for the region. An Arab world run by fundamentalists would not be a party to any negotiations with the West, thus leaving Israel again as the only democratic, rational country in the region. And if the Mossad could arrange for Hamas to take over the Palestinian streets from the PLO, then the picture would be complete.” "Even after the Palestinian uprising began in 1987, the PLO accused Hamas & Ahmed Yassin of acting 'with the direct support of reactionary Arab regimes... in collusion with the Israeli occupation, Yasser Arafat, the chairman of the PLO... [said,] 'Hamas is a creation of Israel, which, at the time of Prime Minister Shamir, gave them money & more than 700 institutions, among them schools, universities, & mosques.’ " - Robert Dreyfuss, "Devil's Game: How the United States Helped Unleash Fundamentalist Islam," chapter 8: Israel's Islamists "Dreyfuss then documents how Hamas has played a useful role in undermining negotiations, which the Israeli right fears more than anything else. Of course, Israel created a beast in Hamas & has found itself in conflict with Hamas in later years (predictable "blowback") & eventually assassinated Yassin & other top Hamas officials. But, Israel continues to play one side off the other, & the history of Israeli support for radical Islam is important to remember, as well as to contextualize it with the wider support rendered to global radical Islam by the US & UK, as well as Arab despots (especially Saudi Arabia) & Pakistan (sadly!). Nor is this a thing entirely of the past." - Dr Javad T Hashmi, Ph. D. candidate in the Study of Religion (Islamic Studies) at Harvard University.

A few of his comments are incorrect but great info otherwise..