Arutzsheva:

Rabbi Shabtai Sabato, head of the Netivot Yosef yeshiva in Mitzpeh Yericho, agrees that the day must be one of thanksgiving, but adds, “It cannot be that we simply go on as if nothing has happened. How can we hang Israeli flags all over the streets, even here in Yesha [Judea and Samaria], without at least an orange ribbon [orange was the color chosen to symbolize the struggle for Gush Katif – ed.] hanging from them? “Yes, the State is the beginning of Redemption – but would this be true had they not merely expelled the Jews from Gush Katif, but also killed some of them? Are there any red lines?” Rabbi Sabato said he would spend the day not celebrating, but rather in the yeshiva study hall, learning Torah.
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Yeshivat Torat HaChaim, which was exiled from N’vei Dekalim in Gush Katif last summer and is now being rebuilt in Yad Binyamin, was the first religious-Zionist yeshiva to reassess its relationship with Independence Day. Already last year, it treated Heh Iyar – the 5th day of the month of Iyar, Independence Day – as a regular day, and shifted the celebrations of Israel’s national accomplishments of this generation to Jerusalem Day, three weeks from now.
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Rabbi David Dudkevitch, the rabbi of Yitzhar in the Shomron, suggests reciting half-Hallel, as opposed to the full Hallel reserved for full-fledged holidays. In partial agreement, Rabbi Gadi Ben-Zimra of Maaleh Levonah explains, “Every believing Jew [of the] religious Zionist camp must always adjust his thoughts, especially in light of what is going on. Above all, this is a country that is totally not obligated to Torah law. Rabbi A. I. Kook said in his time that the secular Zionist statement, ‘Zionism has nothing to do with religion’ must be totally uprooted… We are headed for a state that is not Jewish but rather one of ‘all its citizens.'”
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Rabbi Eliezer Melamed, head of Yeshivat Shavei Shomron in Har Brachah, explained that we must continue to say Hallel on this day: “For many generations, we prayed to G-d and asked Him to ‘save us and gather us together from among the nations, so that we may thank Your holy name and triumph in Your praise [Psalms 106, among the special Independence Day prayers]’ – and now that He has done so, shall we not thank and praise Him?”