Watching the handshakes and arm-clutches of Ehud Olmert and Mahmoud Abbas at the Annapolis meeting last week, and listening to their sometimes soaring rhetoric about a Middle East peace, it was easy to forget that Israel is at war with the winners of the last Palestinian general election, that rockets fired by Palestinians are detonating in southern Israel nearly every day and that 1.5 million people of the future Palestinian state are living under what amounts to an Israeli military siege. The makers of the latest Middle East peace process would love to forget about the Gaza Strip -- at least for the next year, while they try to agree on settlement terms. But Gaza is unlikely to forget about them.

The Islamic Hamas movement, which won the 2006 legislative elections and took sole control of Gaza in June, spent the week of Annapolis quietly doing what it has been doing every week for the past six months: smuggling tons of explosives, rifles, rocket-propelled grenades, anti-aircraft missiles and Katyusha rockets through tunnels from the Sinai peninsula in Egypt. The explosives are used to make the crude Qassam rockets that are aimed mostly at the southern Israeli towns of Sderot and Ashkelon. The Katyushas, new to Gaza, are being saved for the all-out war for which both Hamas and the Israeli army are vigorously preparing.

Already, Israel is staging near-daily raids and airstrikes that have killed more than 200 Gazans this year. The power, fuel and water supplies it controls are being dialed back, with the aim of creating suffering just short of a humanitarian crisis. Defense Minister Ehud Barak has pronounced the same warning repeatedly in recent weeks: "Every day brings us closer to a broad operation in Gaza."

Israeli-Palestinian history tells that a single Qassam hit on an Israeli school or refinery could be enough to derail the fragile Annapolis initiative -- as could the full-scale invasion Barak is talking about. The Israelis, Palestinians and Americans at Annapolis discussed that danger. What they haven't worked out is what to do about it.

The Bush administration, characteristically, favors a policy of continued "isolation" -- it would keep Gaza on ice and turn the rival West Bank administration of Abbas into a showcase. In a few months -- maybe even before a peace deal is reached -- Gaza's population could be asked in an election to choose between continued misery and Abbas's promise of statehood. That might work as long as the Qassams keep missing and Hamas doesn't try something larger. And if it does? Senior administration officials have told Olmert that he should prepare his public to absorb some terrorism without giving up on the talks.

Egypt and Saudi Arabia have a different strategy -- one that directly undercuts Bush's. Both Israelis and Americans believe that the Egyptian government has chosen to tolerate the smuggling from Sinai into Gaza. President Hosni Mubarak, they say, is hedging his bet on Abbas and avoiding a complete break with Hamas. Both Egyptian and Saudi officials are quietly pushing for renewed negotiations between the two Palestinian factions, in parallel with the peace talks. The problem is that Abbas, so far, hasn't been interested in striking a bargain with Hamas.

Olmert's government seems to have more than one strategy. For the record, the prime minister says he doesn't want to invade. "But if we will find it necessary to operate in Gaza, we will operate in Gaza for the security of Israeli citizens," he said during a meeting that I and other Washington journalists had with him last week. For now, Olmert said, he was hoping to stop the rocket attacks with the mix of pinpoint strikes and economic pressure being applied.

At least some Israeli officials, and some Palestinians close to Abbas, are thinking more boldly: They see an invasion of Gaza as not only necessary but desirable. Abbas, they point out, doesn't have the military strength to defeat Hamas. Nor is Hamas likely to permit the election that Bush imagines. An Israeli invasion would have the chance to destroy Hamas's military power and pave the way for Abbas to gain political control. "It's feasible," said one senior official I spoke to. Abbas himself has told U.S. officials that Israel should retake control of the border between Egypt and Gaza to stop the smuggling.

The one option that doesn't seem to be getting serious consideration is perhaps the only one that Hamas itself might accept: a cease-fire with Israel that would end attacks by both sides, open Gaza to normal commerce and allow the peace negotiations to go forward without interference. Such a deal, which is favored by the out-of-power Israeli left, doesn't fit with the Bush administration's vision of a polarized Middle East in which Iran and its allies are irreconcilable. Hamas might indeed be unyielding in its opposition to peace. But if there is no cease-fire, prepare for war.