Today's Haaretz has an article quoting Maj. Gen. Avi Mizrachi as saying that settler violence could spark a violent Palestinian response. This reaffirms two very important points.
Firstly, independent of the political establishment, the IDF is a generally pragmatic organization. It sees threats as they are, even if the tools at their disposal to deal with those threats are not necessarily available. Regardless of the confidence of the Israeli government, these latest comments indicate that the IDF understands that settlements are becoming a security liability for Israel. This bodes well for a security body which will be tasked with responding to growingly complex threats in the future.
Secondly, it illustrates the importance of counterinsurgency vis-a-vis radical settlers. As Maj. Gen. Mizrachi correctly states, most settlers are pretty reasonable people. But if the government continues to fail to properly compensate those uprooted from Gaza in 2005, it shouldn't be suprised if the moderate settler response to the mosque attack is less than outraged. If the government wishes to successfully stop the "price tag" attacks, it's a good idea for them to reach out to the moderate center of the settler movement rather than pandering to the radical right-wing. Otherwise, it could easily be drawn into a violent conflict between the settlers and the Palestinians. The settlers are unlikely to distinguish between civilians and armed personnel. Palestinian militants are unlikely to do the same.