Well, I think such a thing would require a big military presence, for practical reasons, and the Palestinians wouldn't accept that (they wouldn't perceive it as a big change, even without settlements). If you think it through, securing individual buildings in potentially hostile territory is even harder than blockading a city, especially if you don't control the territory overall. Not only would they be perceived as occupiers instead of security guards, they would have a hard time defending themselves if you just station a dozen soldiers at isolated buildings over a big territory. I don't think that is a very realistic idea.
Why would it require a big military presence? Because Israeli's wouldn't be willing to do it without one? How would they be perceived as occupiers if they didn't... occupy anything? Are the UNRWA schools and their security staff seen as "occupiers"? The locals certainly don't seem to see it like that, and while there will certainly be some hostility and suspicion with Israel doing the same at first, if they can avoid committing any atrocities while working basic security those opinions are unlikely to last long in the face of honest attempts to improve their lives, at least not badly enough to provoke violence.
And yes, they'd probably have a hard time defending themselves against an intentional and coordinated attack. That's what I meant by "Israel will have to take some risks if it wants peace". They serve as a disincentive, though. How long will Hamas's popularity last if they start firefights in hospitals and assault schools? If the casualties are actually their fault in real terms, rather than just in Israeli propaganda?
And if their are Israeli security teams there and the buildings are built with Israeli money, there will be a lot more incentive to find other solutions than "bomb them and kill everyone inside" whenever an issue comes up. If they are actually achieving notable improvements in the locals quality of life, they even get actual diplomatic pull in getting the Palestinian government to pursue anyone using the structures for that purpose as criminals lest the aid be pulled out.
It doesn't even have to be anything like that, the point of what I'm trying to say is that Israel isn't going to be able to negotiate peace if it's only tools are "stick" and "less stick", which is where it is right now. It needs to be able to work with "carrot" and "less carrot" as well.
Have they ever proposed as a term of a peace agreement a carrot of some sort? Actually giving something to the Palestinians rather than just stopping some bad thing they were doing?
If you want a stable and allied local government, you need to give them something that can be spun as a straight positive to the people. "Removing Settlers" is certainly a good thing, but it's tied up in the fact that you were adding settlers! It's a neutral position! "Removing the blockades", "releasing prisoners" are both the exact same thing, they just are just a cessation of (often indiscriminate and collective) punishment. They can't be spun as a positive. They might serve as an introductory step, as a sign of trust and a willingness to stop making things worse, but what have they actually offered to make things better, to get people to say "To be honest, I am glad Israel is here, because without them I would have/be able to do (x)"?
If the really want the Palestinians to acknowledge the right of Israel to exist, as a primary goal, at some point they are probably going to have to do something to convince them they would be better off than if Israel did not exist, and right now that's a difficult claim to make.
And now, pictures!
Israel released some images justifying why they bombed Al-Wafa Hospital and the right-to-life center.
The argument basically being that a rocket was fired from the lot across the street.
The Right to Life center is a facility dedicated to caring for those born with Down's Syndrome
and the area in the top right there with the verenda is was a feather in the cap for the
Playgrounds For Palestine society.
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