The ceasefire agreement that was reached between Israel and the Hamas leadership through Egyptian mediation and that has been observed successfully by the two parties since Thursday marks a very significant development with potentially far reaching consequences.

The fact of the agreement spurned a lot of contradicting reactions and analysis mainly because Israel has always expressed a principled position that it will not deal with "terrorists". Secondly, on previous occasions the several ceasefire arrangements that were reached in the past under the auspices of the Palestinian Authority were always unilateral and were never recognized or even acknowledged by Israel.

Perhaps one of the greatest ironies of the agreement is thus the fact that Israel was able to reach such an agreement with Hamas over Gaza-related issues while it hasn't been possible to reach any kind of agreement on anything with the PA over West Bank-related issues. That includes political issues that are being negotiated between PA President Mahmoud Abbas and Chief Negotiator Ahmed Qureia on the Palestinian side and Israeli Prime Minister Ehud Olmert and Foreign Minister Tzipi Livni on the Israeli, with extensive mediation from US Secretary of State Condoleezza Rice. It also includes the practical day-to-day economic and security issues that are being dealt with by Palestinian Prime Minister Salam Fayyad and Israeli Defense Minister Ehud Barak, with extensive mediation and facilitation by the Quartet's envoy Tony Blair.

But Israel's decision to observe a ceasefire with Hamas in Gaza and agree to a gradual reopening of crossings to allow a flow of goods into the impoverished Strip is consistent with the overall Israeli strategy of ridding itself of that problem while at the same time consolidating its control over the West Bank. Hence the reason Israel was able to strike an agreement over Gaza and not over the West Bank has nothing to do with the interlocutor and everything to do with the issue.

Because the issue under consideration with Hamas was Gaza, which Israel has been trying to get rid of, it was possible to reach agreement. Similarly, because Israel has all kinds of plans to maintain control in the West Bank it is difficult and will remain difficult to reach an agreement with anybody negotiating on behalf of the West Bank with the objective of bringing the Israeli occupation there to an end.

And because, in Israel's strategic thinking, the future of the West Bank is different from the future of Gaza, the current division between the two Palestinian areas is very comfortable for Israel. Israel began the policies and practices that separated the West Bank from Gaza. Those policies were unfortunately consolidated as a result of the fighting between Fateh and Hamas and the eventual military takeover by Hamas. It can therefore be expected that Israel will resist any attempt at Palestinian reconciliation and instead continue to encourage the current separation, thus leaving itself two different leaderships to talk to in the two areas of occupied Palestinian land.

Meanwhile, the ceasefire agreement has far-reaching consequences in terms of domestic Palestinian politics. It has helped Hamas achieve an objective that the movement has sought for some while: to be the counterpart for Israel on the Palestinian arena, the party that can determine whether there is war or peace. This in turn will enhance Hamas' position in domestic Palestinian politics as well as among the Palestinian and Arab publics at large. For the same reasons, the agreement will further marginalize the PA and the leadership under Abbas in Ramallah, Fateh in particular.

The ceasefire agreement is consistent with the strategic Israeli objective of undermining the prospects of an independent Palestinian state emerging in the occupied territories. It is such thinking that minimizes chances for negotiations between Israel and the Palestinians, because reaching a comprehensive peace agreement requires maintaining the integrity of the Palestinian territories and respecting the relevant stipulations of international law. That is also the only strategy that can contribute to reversing the balance of power in favor of the peace camp in Palestine.