The few hundred pounds of TNT that brought Rafah’s border wall tumbling down also has shaken Israel’s strategy of isolating Hamas.

The Olmert government watched helplessly on Wednesday as the Islamist group, responding to Israel’s tightening of its blockade on the Gaza Strip, blew holes through the border wall between Gaza and Egypt, enabling tens of thousands of Palestinians to surge across the border and stock up on food, fuel and other provisions.

Before the dust settled at Rafah, both Israel and Egypt were faced with a new reality, which some Israelis suggested wasn't all bad.

Israel’s closure on Gaza, imposed after Hamas seized control of the strip last June and tightened following a surge of cross-border rocket fire last week against Israel, was no more.

In breaking down the border, Hamas burnished its reputation among Palestinians, further humiliating Palestinian Authority President Mahmoud Abbas’ Fatah faction, which it defeated in elections last January and by violence in June. And in brazenly sidestepping Israel’s blockade, which already had stirred international censure, Hamas put Israel on the defensive.

Fearing that Palestinian terrorists who regularly tunnel under the Gaza-Egypt border now are at liberty to transport weapons and fighters across the border as they please, towns in southern Israel went on high alert and the military deployed reinforcements.

Because the Egypt-Israel border is more permeable than the Gaza-Israel border, the Israeli army warned that Palestinian terrorists could use Egypt as a staging ground for attacks on Israelis. Prime Minister Ehud Olmert’s office issued an urgent advisory to Israelis vacationing in Sinai to hurry home.

"This was a resounding failure, a public relations disaster," Danny Ayalon, Israel’s former ambassador to the United States, told Reuters. "And we've lost deterrence."

Some in Jerusalem saw a silver lining to the chaos, suggesting that the elimination of the Gaza-Egypt border provided an opportunity for strategic rethinking.

Defense Minister Ehud Barak’s deputy, Matan Vilnai, said Israel now can finalize its disengagement from Gaza, begun with the withdrawal of troops and settlers in 2005.

"We need to understand that when Gaza is open to the other side, we lose responsibility for it," Vilnai told Army Radio. "So we want to disengage from it."

Other Israeli officials, speaking privately, said this could be a prelude to a full return of Egyptian authority over Gaza. Egypt controlled the crowded coastal territory until Israel captured it in the 1967 Six-Day War, a loss Cairo never appeared to mourn.

“For years, Israel begged to share its control over the territories with Jordan and Egypt. But King Hussein disengaged from the West Bank in the mid-1980s and Egypt, which had always perceived the Gaza Strip as a black pit of terrorism, said, ‘No thank you,’ ” Smadar Perry wrote in the Israeli daily Yediot Achronot. “Yesterday, the black pit of Gaza was forcibly linked to Egypt.”

Throughout the crisis, Cairo has played it cool. Egyptian President Hosni Mubarak spoke of the sudden influx of Palestinians -- the number was put at between 80,000 and 350,000 -- as a humanitarian necessity, making no mention of the fact that his regime had been a partner of Israel in efforts to seal off Gaza and thus weaken Hamas.

“Let them eat, buy food and then go back,” Mubarak said. “Egypt will not allow Gaza to starve.”

It’s unclear when, or even if, the mile-long border wall at Rafah will be rebuilt. As long as the border stays open, Palestinians terrorists will be able to freely bring arms and cash into Gaza from the Egyptian Sinai, Israeli officials warned.

So far, the Olmert government has avoided overt criticism of Egypt, the first Arab power to have recognized the Jewish state.

"I believe Egypt knows what its job is, and we expect them to perform their task in the framework of agreements," Barak said after the border was breached.

Egypt may have its own concerns about its new open connection to the Hamas-run Gaza.

Hamas’ power in the strip will only stoke the flames of its kindred faction in Cairo, the Muslim Brotherhood. The Brotherhood is the most virulent political opposition Mubarak faces, and Jerusalem’s nightmare -- and Mubarak’s -- is that one day they will take over Egypt.

Perhaps not surprisingly, while Mubarak was speaking kindly of the plight of Gaza’s Palestinians, his security forces were rounding up Muslim Brotherhood members taking part in pro-Palestinian protests.

Asked about Gaza’s new reality, the United States reiterated its stance that the strip must be considered, along with the West Bank, part of the future Palestinian state -- a show of support for Abbas’ claim to represent Palestinians in both territories.

For its part, Egypt remained Sphinx-like about its plans. Its foreign ministry declared the situation was temporary and said "every option is under consideration.”