Screwed if they do, screwed if they don't
Yes, this bothers me too, but I don't see what else they can do, given the commanding heights Israel has over the Middle East, thanks to the connivance of such as Blair.
Why is Israel doing this? Well, as David Hare said, experiencing the frustrating delays at Israeli checkpoints throughout the West Bank, because they can.
But also the Israelis are well aware that, even in its currently crippled state, mobile phones play an important role in the resistance, intifadas etc. I bet they'd like to do like Saddam Hussein did in Iraq, and ban them completely in Palestine.
BTW, please don't use "retard" as a term of abuse. It is insulting to all who suffer mental health problems, who ought to be treated with the same respect as other disabled persons.