Is Israel "Appeasing" Hamas?

From Haaretz today:

Participants at a recent inner cabinet meeting were listening to details of the Egyptian mediation initiative between Israel and Hamas on a cease-fire in the Gaza Strip recently, when a senior minister reportedly reminded those present that Israel does not negotiate, directly or indirectly, with Hamas. Shin Bet security service head Yuval Diskin interrupted, saying there was no other way to describe the talks.