THE UPSURGE in fighting between Israel and Hamas over the weekend, and the resulting suspension of Israeli-Palestinian peace talks, demonstrates again a crucial flaw in the Bush administration's Middle East strategy. President Bush, Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas have assumed that Hamas could be bottled up and ignored in the Gaza Strip while a deal for a Palestinian state was worked out. In fact, since the Annapolis conference three months ago, Hamas has repeatedly proved that it can disrupt the process and command the world's attention by firing rockets at Israeli cities and drawing the inevitable military response. That the resulting Palestinian casualties are heavy, and usually include civilians, doesn't trouble the Islamists.

Israel and its peace process partners have three options for Gaza, all of them hard to stomach. One is for Israel too launch a full-scale invasion of the territory with the goals of stopping the rocket attacks and weakening Hamas, perhaps to the point that Mr. Abbas's more moderate Fatah movement might be able to regain control there. A second is to negotiate a deal with Hamas that would end both the rocket attacks and Israel's military strikes and allow the negotiations to go forward. The third is the one Israel has unsuccessfully pursued so far: a muddle-through combination of limited military action and economic sanctions against Gaza. Last weekend, the response escalated to a ground operation in a densely populated refugee camp -- after Hamas's introduction of more-powerful rockets -- with a resulting spike in casualties. But there is scant reason to believe that Hamas will be deterred from further attacks.

A visit to Jerusalem today by Secretary of State Condoleezza Rice may focus attention on one of the Gaza alternatives, an Israeli invasion. But there are good reasons for caution: Casualties on both sides would probably be heavy, outside forces such as Hezbollah or Syria might choose to join the fighting, and Israel could find itself stuck in Gaza without an easy exit. The peace process would meanwhile expire. Rice, who is eager to make progress before the end of the administration's term, will surely press for a resumption of talks. She should ask Mr. Olmert why the attacks in Gaza have not been accompanied by even partial fulfillment of his repeated promises to cut back on military checkpoints and remove illegal Israeli settlements in the West Bank. The absence of such steps leaves Mr. Abbas with nothing tangible to offer Palestinians who reject Hamas.

Arab governments and a growing number of Israelis, meanwhile, argue that a truce with Hamas is the only way forward. Hamas has repeatedly hinted that it is open to one; Egypt has been trying to play broker, and Mr. Abbas suggested yesterday that he might be willing to serve as an intermediary between Hamas and Israel. Predictably, the Bush administration and the Israeli military establishment oppose any such deal, both for ideological reasons and because it could allow Hamas to rest and rearm. But if there is no truce, the war in Gaza will continue -- and the peace process will not move forward.