In the spring of 1996, on the eve of the face-off between Shimon Peres and Benjamin Netanyahu for the premiership, the head of Military Intelligence said the Iranians wanted Netanyahu to win. The MI chief sought to convey that amid the wave of Hamas suicide bombings and Peres' peace talks with the Syrians, Bibi was good for the peace objectors.

The explanation was simple. Iranian propaganda in the Muslim world draws its strength from the Arab-Israeli conflict. So Iran prefers Israeli leaders who would sabotage the Oslo Accords, raise Hamas' status in the territories and perpetuate the conflict.

That MI chief, who argued 15 years ago that Bibi was good for Hamas and Iran, was Moshe Ya'alon, today vice prime minister in Netanyahu's cabinet - the cabinet that made Khaled Meshal and Moussa Abu Marzouk heroes of the day in the West Bank, Gaza Strip, East Jerusalem and a few villages in Israel.

Their victory is another nail in the coffin of Palestinian President Mahmoud Abbas and his colleagues in the Fatah leadership. Again, as in the case of the unilateral withdrawal from Gaza, the Palestinians have learned that the diplomatic path leads them to a dead end, while terror gets settlers out of the territories and abductions spring hundreds of their people out of jail.

The fear of "searing into the Palestinians' consciousness" that Israelis understand only force has placed former Chief of Staff Ya'alon at the head of the objectors to the Shalit deal. On the one hand, they were ready to let an Israeli soldier rot in prison, as long as we didn't give in to Hamas. On the other, they are waging an all-out war against Hamas' main political rivals, who want Palestinian statehood in the 1967 borders. Ya'alon and his colleagues are even threatening to annex territories and stop transferring the wages of the Palestinian Authority's employees, including members of the Palestinian security forces.

The assumption that the Shalit deal is a great Hamas triumph and a fatal blow to Fatah is one of the simplistic observations that have taken over the public discourse since the cabinet approved the agreement. Indeed, in the absence of chances for progress in the peace process and settlement policy, the Shalit deal is the only show in town. Meshal and Netanyahu are now in the lead roles and Fatah's leaders can do nothing but watch the play from the UN gallery.

But there's no sense cutting the Shalit deal off from the large deal between Israel and the Palestinians. Israel can neutralize Hamas' achievement and turn it into a passing episode.

Which Palestinian faction will have the upper hand if Netanyahu announces today that he is willing to resume the negotiations on the basis of the '67 lines and to freeze construction in the settlements until the end of the talks? What would happen to Hamas' "great victory" if Netanyahu decided to free Marwan Barghouti and hundreds of Fatah prisoners after transferring area C territories to Palestinian control?

"Hamas' victory" is not the only myth blossoming on the Shalit deal. A whole bunch of "facts" go with it.

The deal will encourage other abductions for bargaining purposes: A quick look on a Hamas website or that of other organizations advocating a violent struggle will show that abducting Israeli soldiers and civilians remains a standing order. The Israeli governments' "firm stand" in the Ron Arad case did not deter the abductors of Nachshon Wachsman. The refusal of Yitzhak Rabin's cabinet to negotiate to free Wachsman and the (botched ) attempt to release him did not deter Shalit's captives.

Some of the 1,150 terrorists freed in 1985 in the Jibril deal caused the first intifada in 1987: First, the first intifada was not violent. Second, the intifada broke out because of the increasing rage among the young generation.

Deporting "heavy" prisoners is an Israeli achievement: The chances Israel took and the effort it put into the (botched ) attempt to murder Meshal in 1997 on an Amman street and assassinating Hamas man Mahmoud al-Mabhouh in Dubai show that exile can be an ideal habitat for master terrorists. It will be easier for Israel's security services to monitor militants in the territories and act against them when necessary.

Finally, the "fact" that Hamas has emerged as the big Palestinian winner from the deal is doubtful. Freeing Gilad Shalit took away the organization's strongest bargaining chip vis-a-vis Israel. The Israel Defense Forces' maneuvering room has grown, while shifting Meshal's headquarters from Damascus to Cairo will restrict its scope of operations.

If on top of that any progress takes place in the peace process, Egypt will have a strong interest in restricting it further.