The prisoner exchange between Hamas and Israel - announced but not yet concluded - could not have come at a more urgent moment. The fate of the Israeli soldier Gilad Shalit has caused friction between Hamas and Fatah since he was kidnapped on Israeli soil in 2006. Removing such a stumbling block to unity can only be a good thing.

The Israelis will welcome home one man. But the return of 1,027 Palestinian prisoners, many of whom were detained on spurious charges, will have a lasting effect on both society and politics in the West Bank and Gaza. The deal, however, probably will not send home top leaders such as Marwan Barghouti, who could be a unifying figure if released.

The pact comes at a critical moment in Palestinian-Israeli relations. A UN vote on statehood for Palestine is still pending, even as the Netanyahu administration builds settlements at a breakneck speed to make that state all but an impossibility. And yet the greatest challenge for Palestinians remains the intractable divide between Fatah and Hamas, despite the reconciliation that papered over divisions in May.

In a real sense, Hamas is searching for its identity, caught between its past - failed - raison d'être of violent defiance and the hard work of state-building and peaceful resistance. The Shalit kidnapping and subsequent deal will be cast as a Hamas triumph, but that will be true only if it moves Palestinians as a people towards their goals.

In a speech on Tuesday, Hamas's political leader Khaled Meshaal specifically addressed the Palestinian Authority: "This is the achievement of all of us. Let us come together for more achievements in our national project to liberate Palestine and establish our country."

Hamas could live up to those words by backing the Palestinian Authority's bid for statehood - international recognition at the UN would only strengthen demands for justice for prisoners languishing in Israeli jails. But the Palestinian Authority too must be willing to reach out its hand in the better interests of its people.

The prisoners to be freed under this agreement are from Hamas and Fatah, and from throughout the Palestinian Territories. Israel's mass arrests have, in a sense, been self-defeating as prisoners have found a sense of unity that eluded their compatriots, as shown by the 2006 Prisoners' Document. It is time for that unity to break the stalemate on the outside.