Israel supported Hamas for the same reason that Bush supported "faith based" charity
That is, to destroy the notion that citizens in a secular democracy should have any claim on their governments for assistance for any reason. Privatize those functions and put them under the control of fundie whackjobs.
Imperial bullies always choose this--see US support for the fundies who became the Taliban in the 80s, alliance with Saudi Arabia, etc. (One possible exception was support of the Iranian Shah. However the 1953 overthrow of its secular democracy employed conservative mullahs.)
http://www.globalresearch.ca/israel-s-hamas/1817
This has been longstanding Israeli policy. Starting in the late 1970s Israel helped build up the most fanatical and intolerant fundamentalist Muslims as rivals to the nationalist PLO. The terrorist organization Hamas is largely an Israeli creation. A UPI story last year quoted a U.S. government official as saying: “The thinking on the part of some of the right-wing Israeli establishment was that Hamas and the other groups, if they gained control, would refuse to have anything to do with the peace process and would torpedo any agreements put in place.”
The PLO has long been aware of Israeli strategy. In their 1989 book, Intifada, Ze’ev Schiff and Ehud Ya’ari write that Fatah “suspected the Israelis of a plot first to let Hamas gather strength and then to unleash it against the PLO, turning the uprising into a civil war… [M]any Israeli staff officers believed that the rise of fundamentalism in Gaza could be exploited to weaken the power of the PLO…”