If Israelis want peace, they have to talk to the people the Palestinians want, not those anointed and armed by Israel and the US.
One of the points about democracy is that sometimes the "wrong" people win. Many Americans and British looking at their present leaders can ruefully relate to that. Indeed, Ehud Olmert has popularity ratings within a statistical range of zero. Nonetheless, other governments and the political institutions inside their own countries continue to talk to them and recognize them. The rest of the world continued talking to, indeed pandering to Israel, even while the butcher of Sabra and Shatila was its prime minister. That's democracy.
The purpose of the Palestinian elections was to elect a government the Palestinians wanted, not one that Israel liked. Hamas won, fair and square, and did so against a background of Fatah incompetence and corruption that had been connived at, and indeed tacitly encouraged by the west and Israel, in return for Yasser Arafat's pliability at the negotiating table.