Israel does not oppose Hamas because it is a terrorist organization - it is not - or because it denies facts of history like The Holocaust.
Israel opposes Hamas because it is a well-organized, fairly disciplined, and relatively not-corrupt organization, and it is not prepared to accept Israel's unfair, self-serving concepts of peace.
It wants genuine peace, fair and with full consideration for the needs of both sides. It doesn't even pretend the two sides have to be friends to have peace. They do not.
The corrupt old Fatah was mostly ineffective, it wasn't democratic, and many regarded it as a bad joke. Yet this is the group Israel insists on dealing with, or at least what's left of it.
The frustration at the irrationality and unfairness of all this must be horrible at times for Palestinians.
