Hamas’s takeover of Gaza and President Abbas’s dismissal of the national unity government and appointment of one led by Salam Fayyad amount to a watershed in the Palestinian national movement’s history. Some paint a positive picture, seeing the new government as one with which Israel can make peace. They hope that, with progress in the West Bank, stagnation in Gaza and growing pressure from ordinary Palestinians, a discredited Hamas will be forced out or forced to surrender. They are mistaken. The Ramallah-based government is adopting overdue decisions to reorganise security forces and control armed militants; Israel has reciprocated in some ways; and Hamas is struggling with its victory. But as long as the Palestinian schism endures, progress is on shaky ground. Security and a credible peace process depend on minimal intra-Palestinian consensus. Isolating Hamas strengthens its more radical wing and more radical Palestinian forces. The appointment of Tony Blair as new Quartet Special Envoy, the scheduled international meeting and reported Israeli-Palestinian talks on political issues are reasons for limited optimism. But a new Fatah-Hamas power-sharing arrangement is a prerequisite for a sustainable peace. If and when it happens the rest of the world must do what it should have before: accept it.

The events in Gaza have given rise to wholly conflicting accounts. For Fatah and those close to Abbas, they were a murderous, illegitimate coup that exposed the Islamists’ true face. The plan, they say, was premeditated and carried out with Iranian backing. They claim to have video proof of a Hamas-led plot to assassinate Abbas. Hamas, too, denounces an attempted coup, though one planned by Fatah elements determined to rob the Islamists of their electoral victory and overturn the Mecca Agreement between the two rival organisations. They say those elements were fostering lawlessness in the Gaza Strip and that the U.S., Israel and several Arab countries conspired to isolate Hamas as well as arm and train forces loyal to Fatah strongman Muhammad Dahlan in anticipation of a showdown. Hamas’s actions, they insist, were preemptive.

There is truth to both accounts. Evidence and eye-witness stories collected by Crisis Group suggest Hamas’s armed forces – the Executive Security Force and the Qassam Brigades – were strengthening their arsenal and taking steps in preparation for a fight. Their brutality and disregard for human life at the height of the confrontation also is beyond doubt. But Fatah cannot escape blame. From the moment the Mecca Agreement was signed, several of its officials and presidential advisers undercut it. They urged European governments to neither end their boycott of Hamas nor too closely embrace the unity government. Security plans in Gaza understandably could be read by the Islamists as attempts to bolster a force intended to confront them.

The Mecca Agreement’s collapse reflected conflicting domestic agendas: Fatah’s inability to come to terms with the loss of hegemony over the political system coupled with Hamas’s inability to come to terms with the limitations of its own power. But it would be disingenuous in the extreme to minimise the role of outside players, the U.S. and the European Union in particular.

By refusing to deal with the national unity government and only selectively engaging some of its non-Hamas members, by maintaining economic sanctions and providing security assistance to one of the parties in order to outmanoeuvre the other, they contributed mightily to the outcome they now publicly lament. Through their words and deeds, they helped persuade important Fatah elements that the unity government was a transient phenomenon and that their former control of the Palestinian Authority (PA) could be restored. And they helped convince important Hamas elements that the unity government was a trap, that time was not on their side and they should act before their adversaries became too strong. The crisis was not produced by the Mecca Agreement but rather by deliberate and systematic attempts to undermine it.

Recent events present a mixed picture. In Gaza, Hamas has made undeniable strides in restoring order. Alan Johnston, the kidnapped British journalist, was released, and Gazans testify to feeling more secure than in a long time. But the Islamists’ takeover of virtually all PA institutions, the curtailment of basic freedoms and harassment of Fatah members bode ill. Nor has Hamas found a way to cope with the closing of vital crossing points, the sharp drop in trade and the accelerating humanitarian crisis. In the West Bank, too, there are signs of progress, including steps to reorganise the security sector, the infusion of international funds, renewed Israeli-Palestinian cooperation and talk of political negotiations. There is also a darker side, however, including the suspension of basic laws, separation between Gaza and the West Bank and revival of obsolete Palestinian Liberation Organisation (PLO) institutions at the expense of elected PA bodies such as the parliament.

The basic question, to which neither Palestinians nor the international community has responded, is whether it is possible to ensure security and move toward a two-state settlement with a politically and geographically divided Palestinian polity. Paradoxically, the more successful the strategy of strengthening Abbas, the greater Hamas’s motivation to sabotage it. Progress thus would create its own threats. If past is prologue, putting Hamas under pressure without giving it a reasonable alternative would lead it to escalate violence against Israel in the expectation that renewed confrontation would embarrass Abbas, torpedo diplomatic progress and alter intra-Palestinian dynamics. How can Abbas deliver a ceasefire without the Islamists and their allies? How can he legitimise a political agreement with Israel – which must entail difficult and unpopular concessions – if Hamas’s significant constituency feels excluded? How can he move toward building a state if Gaza is left out?

A more promising course would be for Fatah and Hamas to immediately cease hostile action against each other and begin to reverse steps that are entrenching separation between Gaza and the West Bank and undermining democratic institutions. In the longer run, they should seek a new power-sharing arrangement, including:

• a clearer political platform, explicitly endorsing the Arab Peace Initiative;
   
• a commitment to a reciprocal and comprehensive Israeli-Palestinian ceasefire;
   
• reform of the security services, to include de-factionalisation and integration of Hamas’s Executive Security Force;
   
• reform of the PLO, expanding it to include Hamas and Islamic Jihad;
   
• formation of a new unified government approved by the parliament; and
   
• consideration of early presidential and legislative elections, although not before one year after the establishment of new government.

To facilitate this, Arab states and other third parties should offer their mediation and monitoring of any agreement. If an agreement is reached, the Quartet should be prepared to engage with a new government politically and economically.

Under current circumstances and given outside interference from various parties, reconciliation is hard to contemplate. Fatah must accept a truly pluralistic system. Hamas owes the Palestinian people answers as to its ultimate political goals and how it wants the national movement to achieve them. Israel must internalise the need to bring the occupation to an end. The international community must accept the right of Palestinians to select their own leaders. Ultimately, a stable Palestinian consensus and the Islamists’ inclusion in the political system are vital to any peace process. That was Abbas’s original intuition. It led to the January 2006 elections and then to Mecca. The parties’ understandable current anger notwithstanding, it remains the right one.

 Amman/Jerusalem/Gaza/Brussels, 2 August 2007