Netanyahu has privately expressed preference for terrorist Hamas over political Fatah, and Israel has propped up those terrorist groups in the past (this is well documented not a conspiracy theory).

Why? Because Netanyahu and a good chunk of the Israeli population want the Palestinians to cease to exist and its territory to be part of Israel. An opponent that wants to achieve its goals through political action and appeals to the international community meant that there was a risk of Israel being dragged into a two-state commitment. A terrorist group attacking civilians gives those hardliners a perpetual excuse to go to war.

In short: the answer is yes, that appears to be precisely the point: to prevent any possibility of peaceful reconciliation and drive the Palestinians to eventual expulsion or eradication.