One, Israel's policies in the West Bank are part government, and part illegal settlers doing their thing to the extant the government lets them. This government is the most right wing Israel had, hence. Two, the PA is often described by Palestinians as collaborating with Israel, especially on security issues. There's quite a lot of arms, equipment and training going into this. So yes, it does have the power to stifle things, or to let them loose - a card which the PA often plays, or threatens to play. It could do more, of course, but at the price of clashing with either Hamas or local clans. So the level of control it can exert is somewhat location dependent.