Rarely have so many Israelis celebrated an event with such solidarity and national pride. So many of the hundreds of thank-you letters I have received from people I have never met included expressions about their connectedness to this country and to each other. The return of Gilad Schalit brought out the best in most of us, and few people I know did not have tears in their eyes when we saw him for the first time. We all felt proud when he saluted the prime minister and the chief of staff. We cried with joy when we saw him speaking to his mother Aviva on the phone for the first time in over five years. We are all concerned about his recovery and reintegration into his family and into society.

But many people have asked me: what’s next? Does the agreement with Hamas represent a new possibility for political dialogue and understanding with this radical Islamic movement? As the Israeli who probably has more hours of dialogue and exchange with Hamas officials than almost anyone else I can honestly say: I don’t know.

In the moment of elation after it became clear that we had reached an agreement, my counterpart in the negotiations for the prisoner exchange said to me “inshallah[God willing], next we bring peace!” My personal wishes are certainly with his expression of hope. But in the days following it was quite clear from our daily phone calls that chances for dialogue or negotiations between us on political issues are still far away. Neither Hamas nor Israel is ready to enter into the kind of talks that could result in a political agreement that would include prospects for peace. This does not eliminate the possibility of talking to Hamas about a long-term cease-fire, perhaps another version of what some members of the Israeli government call long-term interim agreements, instead of a permanent-status agreement for peace. Right now that is not in the cards.

Right now, Hamas is interested in advancing two main goals: ending the economic and political siege on Gaza and reconciling with Fatah. Both of these goals have their negative and positive impacts for Israel and must be carefully considered and weighed by Israeli decision makers.

ONLY TIME will tell whether or not the opening of the Gaza economy was officially part of the deal to release Schalit. In the early days of the official negotiations I was asked to inform Hamas that once Schalit was no longer in Gaza Israel would allow major economic development and infrastructure projects to be implemented there. Some in Israel believed this could serve as an incentive to the Hamas leaders to advance the deal. It was not.To the contrary: that proposal was essentially ignored. At no point in those talks did my Hamas interlocutors express any real interest in pursuing that discussion. My hunch - that economic issues would not excite Hamas leaders to make compromises - proved to be correct.

Economic development is Gaza may not be a motivating idea for Hamas leaders, but it is in the interests of Israel. Gaza, with nearly 60 percent unemployment, is not a happy place.

People with no work and no income are not prone to become politically moderate. Before the economic siege on Gaza most working people in Gaza, especially those fortunate enough to work in Israel, comprised what could be called Gaza’s middle class. The farmers in Beit Hanoun and Beit Lahia who exported their flowers and strawberries to Europe through Agrexco were very pleased to work with Israelis and were among Gaza’s strongest peace advocates. The 4,500 Gazans who worked in the Erez industrial zone for Israeli companies were gainfully employed and for the most part had very good relations with their Israeli colleagues.

Those days are long gone. For most of the past six years some 90% of the factories in Gaza have been closed. This situation is not normal and it does not serve the cause of supporting the redevelopment of a moderate Gazan middle class.

It is clear to me that Hamas is undergoing deep-rooted changes, although it is too early to predict where these will lead. The continuing revolutions around the Arab world and the spirit of the Arab Spring are having their impact on Hamas as well. As a sister movement of the Muslim Brotherhood, Hamas is now officially part of the opposition to the Assad regime in Syria. Syrian attacks against Palestinian refugee camps were the blow that made it quite apparent that Hamas had to begin to remove its headquarters from Damascus.

Over the past months they have been implementing a plan which they call “soft exit,” aimed at leaving Damascus without making too much noise. But where to go? The Iranians offered them a new home base in Teheran, but Hamas rejected that offer as part of their desire to move away from the extremists elements, particularly in the Shi’ite world. Hamas’s funding from Iran has also come to a standstill. They were offered to relocate some of their operations to Qatar and they are likely to set up some offices there, but Qatar is far away from Palestine.

The most natural place to go is Cairo, and that is in fact what is happening. Despite official denials by both Egypt and Hamas, many of the groups operations that were located in Damascus are now relocating to Cairo. Some have also moved to Gaza.

The Egyptian success in negotiating the final deal for the prisoner exchange was t least partly due to the new leverage that Egypt gained by its willingness to allow Hamas to move to Cairo. Now Egypt, facing severe problems in Sinai, is intent on regulating and managing the relations with Gaza. In the past Egypt feared having to take on responsibility for the welfare of Gaza. Now it seems that if they don’t take on more responsibility they may lose control of Sinai. Egypt is interested in moving the tunnel economy of Gaza above ground and I would not be surprised if in the near future we begin to see the decision to open a cargo terminal at the Rafah crossing.

Hamas is also undergoing the beginnings of internal democratic processes. There are preparations underway for the elections of the Shura council. This is the highest decision- making body of the Hamas movement.

Until now the Shura council has been a secret body that was formed and selected by Hamas founder Sheikh Ahmed Yassin. Over the years, as some of its highest-level members were killed by Israel, including its founder, decisions were made to add new members, such as Ahmed Ja’abri – the strongman of Hamas’s military wing.

Elections for the Shura council would be an expression of the movement’s awareness of the need to be more transparent and accountable to the people. It would also reflect a keen understanding of movement’s loss of popularity prior to the prisoner release. There is definitely competition among both groups and individuals for leadership positions in Hamas, and it will be most interesting to see if more moderate people in the movement can rise to positions of real leadership.

IN THIS context I would like to remind everyone, especially Gazans and even more so the leaders of Hamas, that the people of Gaza paid an extraordinary price for holding one Israeli soldier. The release of 1027 Palestinian prisoners may be considered by some as a victory for the Palestinian people, but what about the more than 2000 Gazans who paid with their lives and the 1.7 million people who have suffered economic destruction and despair because of the decision of their leaders to hold an Israeli soldier in captivity for more than 5 years? It is time for Palestinians to challenge the leaders who have brought that doom on their own people.

It is also time for the Palestinian people who demand that Israel observe international law begin to question the Hamas policies that denied Gilad Schalit even the most basic rights under international law as a prisoner of war. Schalit was denied visits by the International Red Cross. He was denied any contact with his family. For more than five years he did not see the light of day. Islam might guarantee the rights of prisoners to receive health care, food and shelter, but international law requires more than that.

Finally, the questions being debated now by the government of Israel following the boost that was given to Hamas from the prisoner exchange are what policies it should adopt that will strengthen Palestinian Authority President Mahmoud Abbas. Some advisors close to Prime Minister Netanyahu are calling for punishing Abbas because of his drive to achieve statehood recognition through the United Nations. The questions being asked are the wrong ones.

Israel’s concern is what Israel should do to serve the interests, the needs and the values of Israel. Israel wants to make peace with its neighbors. Israel is interested in the establishment of a peaceful democratic Palestine next to Israel. I still believe that Israel’s primary partner for making peace is the PLO led by Abbas. Peace between Israel and Palestine, based on two states for two peoples, remains the only formula for real peace. Gaza and the West Bank will make up the territory of the future Palestinian state. Implementation in Gaza of a peace treaty, after it is reached, will depend on whether or not the regime there is partner to the agreement. That decision will have to be made by the Palestinian people, especially those who live in Gaza.

In the meantime we need to advance Israel’s interests by entering into genuine negotiations with President Abbas. In parallel we need to normalize life in Gaza and reconnect its economy with that of the West Bank.

This is not a reward to Hamas, it is an expression of understanding that steps in that direction will lead to the moderation of the people of Gaza and Palestine.