After a year in which Arabs have fought and died for democracy, the Palestinian Territories seem to be the one place in the region where autocracy is on the ascendancy.

The reconciliation deal signed at the beginning of this week between the Fatah-controlled Palestinian Authority (PA) and the Islamist group Hamas under the auspices of Qatar will give Mahmoud Abbas even more power. The 75-year old will now act as interim prime minister in a caretaker government in addition to his current positions as PA president and chairman of the Palestinian Liberation Organization. Neither the PA-administered West Bank nor the Hamas-controlled Gaza Strip have held elections since 2006, when the outcome precipitated a brief power-sharing arrangement prior to the civil war of 2007.

The deal sets the conditions for the formation of a unity government with Abbas leading “independent technocrats… whose task will be to facilitate presidential and parliamentary elections and begin the reconstruction of Gaza,” according to an official statement. The agreement will see the Western-backed political independent and PA Prime Minister Salam Fayyad—who has led state-building efforts and did much to root out Arafat-era corruption from Fatah’s ranks—removed from his post and effectively sidelined.

Despite their historical rivalry, Fatah and Hamas announced their intention to pursue reconciliation in May 2011. They were motivated not by a breakthrough in relations as much as mutual need, with their traditional power bases weakened by the effects of the Arab Spring. The fall of Egyptian President Hosni Mubarak weakened Fatah, and Hamas was forced to look elsewhere as the ongoing Syrian uprising has threatened to topple the regime of Bashar al-Assad. In response to Hamas’ reticence in defense of its patron Assad, Iran is reported to have halted its financial support.

The shortfall in Hamas’ funding has reportedly been supplemented by Turkey (and rumors have it Qatar), but this has likely come with strings attached: moderating their stance toward Israel and committing to Palestinian unity. This has been reflected in Hamas’ recent behavior with Politburo Chief Khaled Meshaal asking the party’s militant wing to halt attacks against Israel. As a result, Iran is now throwing its weight behind Hamas’ militant rival in Gaza, the Palestinian Islamic Jihad—its members are converting to Shiism, and the group is increasingly threatening Hamas’ power in its home base.

While entering into a unity deal could pave the way for Hamas to assert itself diplomatically, it could put it in a weaker position; it could lose its revolutionary credentials that traditionally set it apart from Fatah. If it does not gain enough diplomatic clout from this deal to make such a sacrifice worthwhile, it may in fact enable other militant groups—or simply Fatah—to outflank it.

Fatah, on the other hand, has been unable to push through a deadlock on peace negotiations with Israel and has opted to pursue reconciliation at least partly to remain relevant in the interim before revived talks. Formal negotiations have been stalled for almost an entire year now, and the low-level talks that were being held in Jordan in the last month do not appear to have yielded any developments. Fatah’s decision to finalize reconciliation with Hamas can therefore be interpreted, partially, as born of the conviction that peace negotiations will not resume any time soon.

Yet reconciliation could prove risky for the Palestinian Authority too, as it may result in the US and EU substantially cutting aid, as providing financial assistance to a designated terrorist organization is illegal for both powers. Interestingly, this could be why Hamas is considering changing its name to the Muslim Brotherhood-the Palestinian Chapter. This tactic would allow Hamas to rebrand itself in line with its ideological affiliates in the Brotherhood, which has gained popular legitimacy in a way that Hamas has not through elections in the last year.

The risk of losing such a significant amount of financial support may also be the reason why Fatah settled on Abbas to head the interim government, as he might have been seen as the most viable option for leader apart from Salam Fayyad, who would never be accepted by Hamas because of his crackdown on Islamist militants and cooperation with Israel on security matters. It is also an attempt to appeal to the West by picking someone safe. However, Abbas is not Fayyad, who was challenging the corruption that has long engulfed Fatah and at the same time was actually building the institutional apparatus needed for a functioning state. In fact, by placing Abbas—who has demonstrated that he is all about high-level political maneuvering—in yet another position of power and sideling Fayyad only communicates that Fatah is resorting back to cronyism.

It remains unclear what position, if any, Fayyad would occupy in an interim government. It also remains unclear how long the interim government will last until new elections are held, as they are now overdue by almost two years. Hamas is going through its own internal battle between political pragmatists like Khaled Meshaal and the hardliners like Prime Minister Ismail Haniyeh. The challenge for the international community is to ensure that it is the pragmatists who prevail and prevent a reprise of the 2007 civil war or the resumption of violence against Israel.

Given Hamas’ current weakness, this would have been an opportune moment for countries like Turkey and Qatar to have pressured the movement into accepting the Quartet Principles as a precursor to their support for a unity government. Perhaps these countries think that piecemeal moderating measures like a unity deal would be sufficient to appease international critics of Hamas and in turn empower both Palestinian groups to enter a renewed round of negotiations with Israel.

The shifting dynamics of the regime make the outcome of this unity deal far from certain, and it may well prove to be a Potemkin arrangement to buy both groups time to recalibrate their individual positions. Yet in the interim, we could be witnessing a dangerous descent back into Arafat-era political stagnation.