"This is one of the reasons I objected to the ceasefire," he said. "I'm not saying how we should do thing, but in order to fight terror we have no choice but to be present in the area."
Diskin also said he strongly opposes the release of former Fatah Secretary-General Marwan Barghouti, who was sentenced to five life imprisonments, as part of a deal which would secure the release of kidnapped soldier Gilad Shalit.
The Shin Bet chief went on to say that "Hamas today has missiles which can reach Kiryat Gat, and maybe even Ashdod."
Diskin said the Palestinian group was interested in maintaining the truce in order to stabilize its power and rule. Israeli officials recently expressed their concern over Hamas' armament during the ceasefire.
The Shin Bet chief added that "the truce is enabling Hamas to get stronger. They have not abandoned their long-term plans. They were not required to stop the smuggling and return (kidnapped soldier) Gilad Shalit in return, and they have achieved their main goals."
According to Diskin, there is no other way but to control the area. "Ever since Operation Defense Shield, there has been a dramatic drop in the number of terror attacks originating in the West Bank due to the IDF's presence in the area and due to the (separation) fence."
Knesset Member Limor Livnat (Likud) said in response, "The Shin Bet chief's remarks testify that the government had completely failed in defending its citizens. A government which fails to listen to the Shin Bet chief, and chooses instead to deal with the disagreements between the prime minister, the foreign minister and the defense minister, must resign immediately.
MK Yohanan Plesner (Kadima) added, "There is a contradiction in the Israeli policy towards Gaza these days. On the one hand, the Israeli interest is to weaken Hamas and bring it down. On the other hand, the truce allows Hamas to grow stronger. This is a strategic mistake and the price of fixing it will be very high."