I voted that it will increase the cycle. Violence will always beget more violence - it is an endless circle.
Unless something meaningful happens it will never end. I think that stopping the building of settlements and starting to remove some of the more remote ones would be a good start. A good faith gesture would put the onus on the Palestinian side. I did just hear Sharon was trying to do just that and recieved resistance from Israelis and doubt from Palestinians so I don't think it would ever happen.
I hate to say it, but it seems that both sides appear to be heading to a solution that is unacceptable: total genocide of one side and a crippling of the other. I believe if that would happen, the Palestinians are on the losing side. They just cannot compete with Israel, weaponwise. Could this spark a 3rd World War?
Mark