One thing has to be understood about Rav Ovadia Shlita, is that his main concern and perspective is different then what others like us might feel and think about the Jewish state. His main concern and belief is for the continued survival of the Jewish people not necessarily as a nation with an army etc. but as a people with the Torah, and keeping the laws available for now, and THEN when the Messiah comes their will be the full state, and real peace etc. His true opinion probably is that the zionists did not bring the ultimate redemption, nor will it necessarily be the catalyst for the redemption. So using the government, and the system best would be to keep building Yeshivot, Mikva's, and other religious places, etc. for the continual Religious and social welfare of Jews specifically the underprivlidged Sefardi Jews.
With that said from their perspective giving away gaza wouldnt be a problem from an idealogical (bringing glory to the nation) perspective, but would from the fact that many Jews suffered, etc.
These thing, expecially the Kanesset process is complicated, one thing that can be seen is that expecially Shas is criticized for doing anything, becuase the people who are doing that first have hatred and then find their excuse and reason, but why arent the good points or the benifit of a doubt given? Also things need to be given some time before criticizing and even worse calling names agains't a Talmid Hacham, which is a great sin and punishment to do.