Prime Minister Olmert's declaration that Hamas must be completely removed from the picture has been translated by him shortsightedly into the conclusion that "we must not create a situation whereby Abbas and Haniyeh continue to cooperate."
Events in the last days indeed led to, for the first time since the Oslo agreements, territorial, diplomatic, and to some extent social
Israel will need to come up with different conclusions and a different policy that can serve it in the long run.
Hamas' participation in last year's elections was meant to serve an intermediary goal – taking part in the government and sharing power – en route to securing the true objective, in the form of a takeover of the PLO, the Palestinian people's recognized and legitimate representative, or alternately, wresting away its status through the creation of a "new PLO," as Hamas' political leaders declared at the time.
Developments in the last two weeks distanced Hamas, in the short run, from securing its objective due to the dismissal of its government and the outlawing of its forces, coupled with international recognition of Salam Fayyad's new government.
Yet still, an Israeli attempt to embark on significant diplomatic moves in the form of a final-status agreement, which entails a Palestinian compromise on the right of return, cannot be premised on the PLO in its current composition and power.
The great difficulty inherent in persuading and enforcing such a move on the majority of Palestinians would lead to the agreement's rejection and serve as a valuable opportunity for Hamas that would open the door for it to realize its plan.
Hamas, which controls all aspects of life in Gaza, including the media, would be able to present the historical compromise as treason against the Palestinian people and enlist the diaspora's support. This would undermine the practical legitimate basis of the PLO under Fatah's leadership, and it would be shifted to Hamas.
Therefore, in the mid and long term, Israel must remove Hamas from the picture not by turning it into a separate and independent entity of the Palestinian people, but rather, by weakening it through the loss of support for its doctrine, to the point that the existing PLO would be able to contain it and enforce on it agreements with Israel and recognition of its right to exist.
Therefore, Israel should in fact be stressing the Palestinian people's unity and the PLO's responsibility for a comprehensive agreement that obligates the entire people – in the West Bank, Gaza, and in the diaspora.
Israel should be hoping that the dialogue and cooperation between the PLO and Hamas does renew, but under a reality and a balance of power that are different than the ones prevailing today – securing such change is dependent on Israel's actions as well.
Israel must internalize, similarly to Washington's position and advice that it would not be able to enjoy the benefits of any kind of agreement while 40 percent of the Palestinians in the territories, who reside in only six percent of the land area (the Gaza Strip) continue to bleed and go hungry.
In the short run, the current separation can serve Israel to display a policy of "stick" vis-à-vis Hamas in Gaza and "carrot" vis-à-vis Fatah in the West Bank. Yet this requires an Israeli effort that is much more complex than these two overused words.
Economic change needed
Israel needs to adopt a more sophisticated "stick" policy beyond its basic duty and right to respond with force to rocket fire and terror attacks.
Shared interests with Egypt – in relation to the threat of closer ties between Hamas and the Muslim Brothers, terror acts in the Sinai, and the fear of Palestinian refugees on Egypt's border – can all serve to justify pressure on Cairo to act more effectively against arms smuggling through the Philadelphi route.
The provision of humanitarian aid and the opening of the crossings could improve Israel's image a little. These and other moves, for example – in relation to the prevention of the establishment of al-Qaeda and global terror cells in the Strip alongside the economic and government paralysis – may lead to a significant weakening in the status of the Hamas movement in Gaza and beyond.
On the other hand, the "carrot" policy is not simple at all. First, such policy alone would not be able to substitute for what is required of the Fatah organization in relation to its own rehabilitation and the clearing up of disputes between domestic and outside representatives, as well as between the veteran leadership and leaders on the ground, who are veterans of Israeli prisons.
Secondly, the Palestinian Authority's economy cannot be based only on fund transfers from Israel and international aid. The economy would have to be rehabilitated under a different reality than the one that currently exists in all matters related to curfews, roadblocks, the usage of main roads, entry into the Jordan Rift Valley, the border area with Israel, and to east Jerusalem.
Without significant economic improvement, the new government would be unable to elicit the most basic trust that it requires from the Palestinian public in the West Bank.
Thirdly, Israel would need to rearrange the operations of Palestinian security forces outside major cities in order to prevent Hamas from acting in Palestinian villages. In addition, there would be a need for a realistic security coordination apparatus that ensures that Palestinian police do not become "collaborators" with Israel and consequently lose the public's trust.
These three conditions are necessary for change to take place, but they are insufficient. Only the renewal of the diplomatic process between the sides in a manner that leads to a final-status agreement based on principles both sides already know would be able to deliver the goods.
This kind of final-status agreement, which would be presented against the backdrop of an ongoing Hamas weakness in terms of its ability to provide services and security in Gaza – as opposed to stability and a different economic situation in the West Bank under the rehabilitated Fatah government – could serve to create another opportunity for Israel and for the legitimate representative of the entire Palestinian people.