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.

RECOMMENDATIONS

To the Islamic Resistance Movement (Hamas), the Palestinian National Liberation Movement (Fatah) and the PA Presidency:

1.  Cease all mutual incitement and hostile actions and take appropriate disciplinary actions.

2.  Refrain from measures in the Gaza Strip or the West Bank that affect the normal functioning, character and personnel of public institutions except where absolutely necessary to ensure law and order, and emphasise the temporary nature of any such measures.

3.  Seek the reopening of Gaza crossings under a mechanism that could involve the Presidential Guard, a third party or the Palestinian private sector.

4.  Seek return to status quo ante by:

(a)  in the case of Hamas, agreeing to relinquish control over all PA and Fatah installations seized since 1 June 2007, immediately restituting private property to lawful owners; and

(b)  in the case of Fatah and the PA presidency, agreeing to revoke the 19 June 2007 PLO Central Council resolution mandating early PA presidential and legislative elections as well as other presidential decrees and PLO Central Council resolutions issued since 14 June 2007.

5.  Negotiate a new power-sharing agreement, including:

(a)  formation of a new, unified government subject to Palestinian Legislative Council (PLC) approval;

(b)  a mandate for the PLO Chairman to negotiate with Israel on a political settlement of the conflict;

(c)  commitment to present such a negotiated political agreement to a referendum or to national institutions for ratification and a pledge to respect the outcome of such a ratification process;

(d)  commitment to a comprehensive and reciprocal Israeli-Palestinian ceasefire, including halt to all military operations, action against armed groups and effective measures to end weapons smuggling;

(e)  endorsement of the Arab Peace Initiative;

(f)  integration of Hamas and Islamic Jihad into a reformed PLO;

(g)  reform of the security services, including de-factionalising the PA security forces, integrating the Executive Security Force (ESF) into these forces and transforming them into a unified, coherent and disciplined force; and

(h)  agreement to consider early presidential and parliamentary elections which, if held, would be no sooner than one year after establishment of the new unity government.

To Arab States, the League of Arab States and Third Parties in Contact with Both Sides (e.g., Turkey, Norway, South Africa, Switzerland):

6.  Mediate between Fatah and Hamas, including by engaging with Hamas leaders.

7.  Upon reaching an agreement, create a reporting, monitoring and dispute resolution mechanism to support implementation.

To the Quartet (U.S., EU, Russian Federation, UN):

8.  Allow and encourage both Tony Blair and the future UN Middle East Envoy to engage in contacts with all relevant parties to the conflict, including the Hamas leadership and de facto authorities in Gaza.

9.  Agree to engage politically and economically with any future Palestinian unity government formed on the basis of the Mecca Agreement.

To the Government of Israel:

10.  Allow supplies and merchandise to move freely into and out of Gaza, including via the Karni crossing, under one of the arrangements mentioned above.

11.  Facilitate the movement of goods and people within the West Bank and remove barriers that do not have a clear security function.

12.  Pursue a comprehensive and reciprocal Israeli-Palestinian ceasefire and a speedy prisoner exchange.

13.  Agree to begin negotiations with the PLO Chairman toward a two-state solution.

To the European Union and its Member States:

14.  In all statements and contacts with the PA government in Ramallah, encourage reconciliation between Fatah and Hamas.

15.  Provide assistance to both people and institutions in Gaza, as well as to those in the West Bank, and design assistance programs so as to avoid exacerbating the split between the West Bank and Gaza.