A persistent theme of the recent Arab revolutions has been a fear of Islamists coming to power via democratic means. For Middle East analysts based in the West, all eyes are on Egypt's Muslim Brotherhood and its likely fortunes in the parliamentary elections scheduled for June. Statements made by senior representatives of the Brotherhood about the impossibility of women or Coptic Christians holding the presidency, or how Iran is a model for human rights, should give democracy proponents pause, since they seem to confuse the concept with the mere holding of elections. Democracy properly understood means the development of civil society, constitutional guarantees that are not easily nullified by a ruling party, and safeguards on the rights of minorities and women—all things that Islamists have historically sought to undermine by the "one man, one vote, one time" principle that sweeps them into power and then threatens to keep them there indefinitely.

Egypt and other Arab countries struggling to prevent extremists from hijacking democracy should look to an unexpected place: Palestine. The state-building program instituted by Palestinian Authority Prime Minister Salam Fayyad has focused not only on building up the West Bank economy but also on the concomitant marginalization of cultural Islamism in advance of new elections.

Hamas, the Palestinian wing of the Muslim Brotherhood, won the 2006 parliamentary elections held throughout the occupied territories, but it has controlled only the Gaza Strip since a bloody civil war a year later split the Palestinian government along geographical lines. Every Palestinian legislator's term expired more than 400 days ago, and the Palestinian Authority, based in Ramallah, has called for new parliamentary elections at least three times since then, the latest instance coming in response to the popular revolutions on its doorstep. Hamas has rejected each call, claiming that it doesn't recognize the legitimacy of Fayyad's premiership. But Hamas' real fear is clear to anyone who studies the latest polls. According to the Palestinian Center for Policy and Survey Research, if legislative elections were held today, 42 percent of Gazans and 39 percent of West Bankers would vote for Fatah, while just 33 percent of Gazans and 21 percent of West Bankers would vote for Hamas.

Anyone taking the Pepsi Challenge of Palestinian self-determination can see why this is so. The West Bank economy grew by 7 percent in the first half of 2010, according to the World Bank. Unemployment there fell from 20.1 percent in the third quarter of 2010 to 16.9 percent in the fourth. Since Fayyad put his program into action, 1,100 miles of road have been laid, and more than 120 new schools and 11 new health clinics have been built throughout the West Bank. The Nablus-based Palestine Stock Exchange hosts 40 publicly traded companies, the largest of which, the Palestine Telecommunications Co., made a $122 million profit in 2010. Meanwhile, Gaza is still subject to a joint Israeli-Egyptian blockade imposed because of Hamas' refusal to recognize Israel or renounce violence. Its near-feudal economy is almost totally reliant on the export of strawberries and flowers. Unemployment stands at 37.5 percent. And instead of laying roads, Hamas has been bulldozing "illegal" houses in the southern town of Rafah, leaving 150 Gazans homeless and living in tents.

Fayyad's modernization efforts have also been waged at the cultural level. In August of last year, he delivered a little-publicized speech at an annual ceremony honoring secondary-school and university students. He cited the need to put an end to "religious fanaticism, which is engulfing our schools and universities, and narrow-minded backwardness manifested in behavior such as avoiding handshaking of the opposite sex." Hamas predictably denounced this initiative as a "war on Islam" and an attempt to teach "pornography" to Palestinians. Fayyad's point, though, was unmissable: A Palestinian state should look like Dubai, not Iran.

Another, more controversial, component of Fayyad's cultural-reform package has been an attempt to rid West Bank mosques of Hamas-affiliated clerics who use their pulpits to spew anti-Semitism and to incite violence against both Israelis and "collaborationist" Palestinians. As reported last December by the Washington Post's Janine Zacharia, all 1,800 mosques in the West Bank have fallen under the administration of Mahmoud Habbash, the Palestinian Authority's minister of religious affairs, who emails every imam of every mosque a pre-approved "script" for Friday sermons. One Hamas-affiliated imam who doesn't much like this policy is Hamid Bitawi, who was cited by Zacharia as "a well-known Islamic religious authority in Nablus who delivered sermons for four decades." Bitawi is also known for calling suicide bombers "angels sent from heaven" and for providing theological justifications for why children should blow themselves up.

State censorship is one reason Fayyad's government is said to be an example of creeping authoritarianism backed by Western money. However, many European countries, including Great Britain, have laws on the books prohibiting incitement to violence and the promotion of religious or racial hatred. Since many West Bank mosques are publicly funded, why can't the P.A. immunize them against extremism? Fayyad's defenders would argue that a region already devastated by two bloody intifadas and Israeli reprisals cannot simply shift from occupation to ACLU-level permissiveness overnight. The danger, of course, lies in the continuance of such proscriptive policies after a period of "emergency rule" expires. Another disturbing trend is the Palestinian Authority's own bouts of fanaticism. P.A. television still routinely refers to Israeli cities as being part of Palestine; Fatah still consecrates terrorists as "martyrs"; and maps in some school textbooks show a Levant from which Israel is conspicuously absent. Nevertheless, it has become impossible to downplay or ignore how much Fayyad's reforms have helped normalize Palestinian society.

Witness the surprising aftermath of the brutal murder of the Fogel family in the West Bank settlement of Itamar two weeks ago. On Israel's Channel 10, veteran reporter Shlomi Eldar announced that he'd just got back from Nablus, formerly a hotbed of Islamist agitation that, thanks to Israeli-Palestinian security cooperation, was recently designated "terror-free" by the Israel Defense Forces. "I went to [Nablus] today, and was very surprised," Eldar said to a somewhat skeptical panel. "People on the street were willing to condemn the murder unequivocally, in Arabic and in Hebrew, with no embarrassment, in front of the camera, and even identify themselves." The broadcast then cut to interviews Eldar conducted with ordinary Palestinians standing in front of a well-trafficked cafe. One man said: "It's forbidden to kill, not children, and not old people and not women, that's according to the religion. The person who says otherwise, he's really crazy." Another man said: "People who were in their home, sleeping in their place of security. To go in and murder them with a knife. Where is the heart? Where is the mercy? Where is the humanity?" According to Eldar, these views were not anomalous, they appeared to be representative of opinion in Nablus.

Knowing its credibility is evaporating, Hamas has begun to act desperately. In recent weeks its agents have stolen automobiles belonging to the Palestinian Central Elections Commission and medical supplies intended for Gazans. And the party's politics, said to be divided between the Gaza regime and its exiled ideologists in Damascus, have grown manic-depressive. When Hamas leader Ismail Haniyeh invited Palestinian Authority President Mahmoud Abbas to come to Gaza to discuss reconciliation, Abbas surprised him by accepting. Having had its bluff called, Hamas responded to this acceptance by denouncing Abbas as a Mubarak-like dictator.

The Islamists clearly have little interest in reuniting the P.A. since they've been violently suppressing demonstrations in Gaza calling for exactly that. They've also taken to targeting journalists. Last weekend, Hamas security agents raided the offices of Reuters in Gaza, stealing cameras and wiping the data off other equipment used to document the regime's crackdown on pro-unity protests. One Reuters employee was beaten with a metal bar and another was threatened with being thrown out of a window. The offices of CNN and the Japanese network NHK were similarly ransacked, and a Palestinian Associated Press cameraman was assaulted. When 100 reporters gathered on Saturday in front of a government building in Gaza in defiance of such media intimidation, Hamas attacked that demonstration, too.

Hamas has also escalated its military operations, launching as many as 60 mortars and rockets into southern Israel in a single day last weekend, and it took credit for the attacks—the first time it has done so since Operation Cast Lead in 2008. The strategy is almost certainly intended to goad Israel into another war. Fayyad, meanwhile, enjoys the fruits of a stable economy, a relatively calm populace, and strong international support. And as a subtext to his own pioneering state-building effort, he can point to Hamas' mischief as proof of what Islamists will get up to before they even have a proper country to ruin.