The Fateh-Hamas Doha declaration of February 5 is many things, some more grounded in reality than others.

At the regional level, the declaration represents yet another step forward for political Islam. This takes the form of new agreements between Hamas and Fateh, mainly to set up a technocrat government charged with organizing elections and beginning reconstruction in Gaza, and to move toward integrating Hamas into the Palestine Liberation Organization. It is also another feather in the cap of Qatari diplomacy, which has been quick to fill the void left by the weakening of the patrons of the two Palestinian movements, Syria (Hamas) and Egypt (Fateh).

For Fateh leader Mahmoud Abbas, the agreement represents Hamas' acquiescence in his leadership, at least temporarily. And it seemingly enables him, without making significant concessions, to keep juggling in the air the balls of negotiations with Israel under Jordanian auspices and national reconciliation and reunification with Hamas/Gaza. "Seemingly" enables, because the sharp "either Hamas or us" reaction of Israeli Prime Minister Binyamin Netanyahu and the guarded response of part of the Quartet appear at least temporarily to preclude further talks. In actuality, the chances of either reconciliation or peace "pre-negotiations" reaching fruition are low, but as long as both balls are in the air, Abbas is virtually in control.

For the Hamas leadership, the Doha declaration exacerbated long-brewing tensions between Khaled Meshaal, who signed it, and the Gaza-based leadership under Ismail Haniyeh that immediately disowned it. While Hamas will presumably patch over the differences, this glaring dispute provides yet one more indication of the fragility of the entire reconciliation process.

For Netanyahu and his hard-line government, Doha delivered another eagerly seized rationale for avoiding serious negotiations with Abbas--as if Netanyahu had not ably invented enough excuses already. But then, Abbas' own positions and attitudes have in any case rendered negotiations under the Oslo framework pointless for the past three years. Perhaps more distressing is what the Doha event says about Israel's lack of sound strategic thinking on the Palestinian issue in general. Even the wispy prospect of Palestinian reconciliation should force us to confront this dual failure.

The Hamas-Fateh break in the Gaza Strip in 2007 caused Israel to lay siege to the Strip on the basis of totally unrealistic goals regarding the rewards of economic warfare: that Hamas rule would collapse or be overthrown and that Gilad Shalit would be released. Neither of these goals was achieved, while for several years collective hardship was imposed on 1.5 million civilians. (For Shalit's release we can thank Egypt's military rulers, and for a partial lifting of the siege we can "thank" the Mavi Marmara fiasco.)

Nowhere is there evidence of Israeli rethinking regarding Gaza. Are we at all interested in Gaza-West Bank reunification, whatever the terms, or are we better off with two "Palestines"? Should Hamas' offer of a long-term ceasefire be so readily dismissed in a regional reality increasingly dominated by political Islam that in any case rejects peace with Israel? If Hamas succeeds in exploiting reconciliation to take over the Palestinian national movement in the West Bank as well as Gaza, we may well regret our lack of creativity on this issue.

Then there is our failure of strategic thinking regarding the West Bank and our negotiating partner there, the PLO. The inevitable conclusion to be drawn from the demise of nearly 20 years of negotiations, including two attempts at the highest level (Camp David 2000 and Olmert-Abbas 2008) to resolve all final status issues, is that the Oslo framework has run its course and needs to be replaced with a new, post-Oslo format.

Abbas, alone, appears to have understood this when he turned to the United Nations and asked for recognition of a Palestinian state in order to create a new, state-to-state basis for negotiations. This, incidentally, is the third initiative he is juggling, and without doubt the most intriguing and potentially constructive.

Israel's strategic failings regarding both Palestinian camps are shared to an extent by the Obama administration and the rest of the Quartet. If, despite the odds, Fateh-Hamas reconciliation moves ahead, elections are held and Hamas is integrated politically into overall Palestinian governance, a new strategic paradigm will emerge to replace those that have confounded us so far. And it will be part of a broader, regional challenge to Israel and the West by political Islam.

At this point, we and our friends (and critics) in the West seem distressingly ill-equipped to deal constructively with that paradigm.