The government of Israeli Prime Minister Ehud Olmert is resigned to Hamas retaining control over the Gaza Strip for at least a few years, a senior Israeli official told FOX News on Tuesday, adding that the Jewish state is equally determined, when timing allows, to press a military solution to expel the terrorist group from the Palestinian territories.

Gaza is history, the official said glumly over Starbucks lattes and muffins in a downtown hotel suite prior to a whirlwind day of meetings with top Bush administration officials. Palestinian children in the West Bank soon will have textbooks in which they learn that the Gaza Strip is a piece of land that used to belong to the Palestinian Authority.

This gloomy assessment of the prospects for rolling back Hamas' violent takeover of Gaza, which accounts for 5 percent of the Palestinians' land but 40 percent of their population, comes less than a month before the Bush administration is to host a Mideast peace conference in Annapolis, Md., and as Israeli security officials cite an alarming increase in the smuggling of weapons and terrorists through porous Egyptian crossings into Gaza.

An Israeli Embassy official in Washington told FOX News the Egyptians three weeks ago allowed 85 Hamas terrorists and 30 affiliated with Palestinian Islamic Jihad, all trained in Iran, to cross into Gaza and deploy in positions close to the Israeli border.

Testifying before the Knesset's Foreign Affairs and Defense Committee on Monday, Yuval Diskin, the head of Shin Bet, Israel's internal security service, detailed how Palestinian terrorists have smuggled more than 112 tons of explosives into Gaza since Israeli occupation forces withdrew from the strip in 2005, with 70 tons, or roughly 63 percent of the total, coming just since Hamas' coup in June.

Israeli officials estimate an additional 200 tons of explosives were already in Gaza, under the control of the Palestinian Authority, at the time Hamas seized control of the territory.

Also on Monday, Brig. Gen. Moshe (Chico) Tamir, head of the Israel Defense Forces Gaza Division, told reporters in Jerusalem that Hamas is secretly building a bunker system to complement fortified rocket-launching and surveillance positions.

There's a big difference in the quality of [Hamas'] fighting capabilities now, the embassy official said.

Gaza will not remain an entity of terror, vowed the senior Israeli official, in between scheduled meetings with Homeland Defense Secretary Michael Chertoff and Secretary of State Condoleezza Rice.

Israel "cannot accept a terror state between itself and Egypt. What we need is a bit of time. We need a few years to develop anti-Qassam rocket rockets, or anti-missile missiles," he said, struggling in otherwise perfect English to describe the weaponry that will enable Israel to combat the near-daily launch of unsophisticated Qassam rockets into Southern Israeli population centers by Palestinian terrorists in Gaza. The attacks have killed 12 Israelis in the last six years.

Asked if he agrees that ending Hamas' control of Gaza can only be accomplished through a military solution, the official answered: "Of course." Key to achieving this goal, the official said, will be to build up the Fatah-dominated security forces of the Palestinian Authority in the West Bank, which boasts about 20,000 security troops.

But the Israelis see this as a step-by-step process, a painstaking upgrading of equipment and training married to the struggle to instill in the Palestinians a fundamental respect for the rule of law and not the kind of goal that can be achieved instantaneously through a political meeting such as the Annapolis summit. "We cannot go to final status [issues] before this is accomplished," the official cautioned.

The official had recently met with Britain's Tony Blair. The former prime minister serves as an envoy of the so-called Quartet, the group that encompasses the United States, Russia, the European Union and the United Nations and has promulgated the road map to a two-state solution to the Israeli-Palestinian conflict.

Blair's role has been publicly described as helping the Palestinians to build the institutions that will eventually enable them to lead a sovereign state. The senior Israeli official said he did not think Blair grasped the enormity of the implications of Hamas takeover of Gaza and that he tried to impress on the former prime minister that the coup marked the first time all the assets of a modern state had been transferred to a terrorist group within three days: 200 tons of explosives, anti-tank missiles, rifles, ammunition, "the archives," the official exclaimed at one point. Can you imagine? All of the archives of the Palestinian security services! It's as if the archives of the FBI were handed over to Al Qaeda.

Blair, according to the Israeli official, responded by saying he has a lot of money to disperse, but fearing endemic Palestinian corruption was planning instead to give out projects rather than funds.

James Rosen joined Fox News Channel (FNC) in 1999. He currently serves as the chief Washington correspondent and hosts the online show "The Foxhole." His latest book is "A Torch Kept Lit: Great Lives of the Twentieth Century" (Crown Forum, October 4, 2016).