This week's Fatah Congress was based on the hope that the Palestinians can find a successful political way forward, but there is the all-too-real dreadful possibility that the Palestinians will fail and the Israelis will continue their decades of occupation and domination. At the Congress, Fatah did not debate what political and social alternatives there might be for the Palestinians if the two-state solution turns out to be unworkable. And it is all too easy to see Israel refusing to withdraw from its colonies and safe corridors on the West Bank. In this situation, Fatah's failure is that it has not come up with any option other than either living under occupation, or returning to armed resistance.

This absence of sensible political options if the two-state solution fails, is one of Fatah's major problems in seeking greater legitimacy with its people, since it has poured all its energy into one political option, which is to make peace with Israel. But the Palestinians can see that Israel has no intention of helping Fatah by delivering their side of the bargain. Peace requires that two sides agree, and Fatah is stuck with Benjamin Netanyahu's very clever Israeli government, which will remove a few road blocks and ease a few illegal restrictions while doing absolutely nothing to withdraw from the West Bank.

Rather than doing anything to plan ahead for the predictable failure of its core strategy of the two-state solution, Fatah used the Congress to deepen its dispute with Hamas, Palestinian National Authority President Mahmoud Abbas opening with a ritual appeal for Palestinian unity and an insulting reference to Hamas as "gloomy coup-makers". This courtesy was roundly returned when Hamas replied from Gaza, describing Abbas' speech as "hostile" and insisting that Fatah has to "stop security cooperation with Israel". The week gave Fatah a lot of television coverage, and its delegates were able to bask in the brief fame that such a Congress gave them, but their discussions were light years away from the real action on the streets of the West Bank, where the Israelis are in charge and do not look like they're going away.

If Fatah is to recover its soul, it needs to find a political way forward that does not involve returning to the armed struggle, nor admitting total failure. Even Abbas' idea of putting a time limit on the Arab Peace Initiative is not enough. This offer from all the Arab states agreed at several Arab summits is that the Israelis should give back all the West Bank and Gaza to the Palestinians in return for complete recognition from all the Arab states. But Fatah needs to plan for an alternative to the Peace Initiative because the offer of normalisation has been hijacked by the Israelis and Americans to become part of the start of the process, which is wrong since it has to be part of the final answer.

But while Fatah talks and Hamas endures the Israeli-Egyptian blockade, the vast mass of the Palestinian people need to get on with their lives. The 3.8 million Palestinians living in the West Bank and Gaza are stuck with their situation, since the Israelis are not willing to change. But the six million Palestinians scattered around the world are also not willing to commit to doing anything about the all-too-likely failure of the two-state solution. Quite reasonably, they have their lives to lead and they are slowly becoming integrated into their host countries. The middle-class professional living in Michigan or Britain is not about to rush back to Palestine to try his or her luck in the uncertain times dictated by continued Israeli occupation. They are busy furthering their careers, raising their families and seeking a pension and a home. Along with the many millions of other Arabs scattered around the world, they are proud of their Arab heritage, but they are not ready to trade their personal security for the uncertain political leadership that they are being offered today.

The reinstatement of the Palestinian movement as a popular mass movement, committed to finding justice, requires a total rebuilding of Palestinian structures. Such a radical development is way beyond most people's present thinking, but it might be encouraged by the new thinking coming out of Obama's Washington, which offers a small window of opportunity. Planning for such ideas has always been available in Palestine from the eminent thinkers and activists of civil society, if not the political leaders who have largely ignored such awkward thinking. But such thinking will become vital if (or when) Israeli intransigence proves that the two-state solution will be a failure.