If you were Prime Minister of Israel, how many terrorists would you be willing to release in order to get Gilad Shalit back? and you don't even know if he's dead or alive. Nicolas Sarkozy, the President of France, said to Gilad's father that he's alive but I don't think he actually knows. He probably just told him what he wanted to hear.
Would you release the masterminds and terrorist leaders with the blood of scores of Israelis on their hands? If it was up to me, I would only release them in a real comprehensive peace deal. Of course that won't happen for a long time. I would offer to release those who have committed lesser crimes which could number up to the thousands if I understand correctly.
I understand why Israel released Samir Kuntar. I might have made the same deal. A lot of non-Jews can't understand it because they don't understand how much Israel values the lives of its soldiers and how important it is in the Jewish tradition to bury our dead. As the Gaza war has shown, Israel is not willing to risk another Jenin. The IDF just can't go room to room to search for weapons anymore, especially not in Hamas controlled Gaza.
So why deal with Hezbollah and Hamas? I believe Israel achieved 'deterence' but the price to get Shalit back is too high yet. During the Gaza, Thomas Friedman explains in his column about 'deterence.' He talks about how Meshaal, the leader of Hezbollah, apologized to Lebanon on TV on a channel not of his organization. Untill the Hamas leadership apologizes to the Palestinians on a Fatah controlled channel, I would not release the terrorist masterminds of Hamas and other Palestinian terrorist organizations. Israel must achieve uptimum 'deterence' in order to take such a deal.