1) And the winner… is President Morsi

That Egypt’s new president has emerged from this episode strengthened both internally and externally appears to be something of a consensus. Mohammed Morsi is being widely praised for having struck the right balance between a pragmatism that enabled him to deliver the goods on a ceasefire and a principled stand in support of the Palestinians, which guaranteed that he could not be cast as Mubarak II. Unsurprisingly, there is domestic criticism of Morsi’s role suggesting both that Morsi was back to playing Egypt’s old role as America’s policeman and/or that he was insufficiently focused on Egypt’s needs at home. Neither critique, though, is likely to gain much traction. If anything, the timing of the crisis also worked rather well for Morsi, enabling him to claim a win against the backdrop of a difficult domestic climate with the tragic train crash in southern Egypt (which otherwise would have dominated the news and led to severe criticism of the government), with revolutionaries and police clashing in Cairo, and with a constitutional crisis simmering. That crisis has now deepened with the President’s assumption of broad new powers, the timing of which is viewed in many quarters as being linked to internal and international backing for Morsi’s role in the Gaza crisis.

Morsi emerges from his mediating role with increased credit in the bank, both metaphorically—the international community relied on Morsi’s team to broker the truce—and literally, with the IMF approving a $4.8 billion loan to Egypt, coincidentally on the same day of this diplomatic achievement (and on terms which would make many a European state green with envy). Much has been made of the close Egyptian-U.S. coordination throughout the crisis and especially of the six phone calls held between the Egyptian and American presidents during the past week. Morsi was able to manage the U.S. relationship, the Hamas relationship and to have his security officials broker an arrangement with Israeli counterparts while at the same time expressing unequivocal and distinctly un-Mubarak support for the Palestinian cause, and opposition to Israeli policies, recalling his ambassador from Israel and dispatching his Prime Minister to appear with Gazan Prime Minster Haniyeh in a show of solidarity with a Gaza from where rockets were being launched at Israel. 

All of which does not add up to a trouble-free future for Morsi’s Egypt in the Israel-Palestine arena. Egypt now has a degree of responsibility for preventing violence between two actors over which its control is very, very limited (Hamas and Israel). It also still has the headache of security in the Sinai to address. But Morsi is likely to remind his Western friends that if they are unable to use a period of quiet to deliver broader progress on Israeli de-occupation, then he cannot be held fully responsible for the consequences later on.

2) Israel and Egypt: a misplaced bear-hug and a misread regional map

The past week also represented Egypt’s return to the regional stage as a significant and, in this crisis, even decisive player. Especially in the latter Mubarak years, the absence of Egyptian political-diplomatic weight—caused by Egypt being so deep in the U.S.-Israel camp—created a rather gaping regional vacuum. While the reemergence of Egypt as a leading Arab power will take time, and will have to be balanced against domestic priorities, the past week nevertheless marked an important debut for President Morsi on center stage. And it is this debut that has received rather favorable reviews across a range of capitals, including Washington and, perhaps most intriguingly, Jerusalem. That is where things get complicated.

It certainly makes sense for Israel to want to strengthen or even rebuild its relations with the new Egypt. However, as this crisis de-escalated, Israel’s leadership, at times, appeared to go much further in attempting to lock Morsi in a bear-hug (notably in comments at the Israeli leadership press conference endorsing the ceasefire). The message that Israel is trying to send is that, even in the new regional reality, Israel can act militarily against the Palestinians and Egypt will buckle under and, with a little U.S. pressure, will do Israel’s bidding—in effect, viewing the past days as Act I in the Mubarakization of Morsi. 

That interpretation will be attractive and hurled at Morsi by some of the Muslim Brotherhood’s opponents inside Egypt and in the Arab world—and it also appeals to some of Israel’s supporters. It is, however, likely to be a misreading of Morsi and of the regional map. It's worth recalling the praise heaped on Turkish Prime Minister Recep Tayyip Erdo?an when he assumed an interlocutor role between Israel and Syria in 2008. Both Erdo?an and Morsi can be pragmatic but they cannot be expected to do Israel and America’s bidding when it comes to the continued denial of the dignity and freedom of Palestinians under occupation, itself a source of humiliation in the Arab and Muslim worlds, and central to their individual and movement narratives. 

Efforts to resolve the crisis took place during a pre-scheduled bilateral visit by Erdo?an to Cairo, which signified the further strengthening of Egyptian-Turkish ties. “Turkey and Egypt are set to develop a common strategic vision for regional and global issues," wrote Erdo?an’s adviser Ibrahim Kalin. "Both work towards finding a solution to the Palestinian issue based on equality and dignity.” A pragmatic Israel will likely find in a pragmatic Morsi an address for mutually beneficial problem solving. But the Israel of Netanyahu and Lieberman tends to be characterized by an absence of pragmatism as it entrenches Palestinian disenfranchisement. Under those circumstances cooperation with Egypt will remain limited. Morsi is unlikely to be a candidate for Mubarakization. Israel take note.

3) An Israel in transition

At times, operation Pillar of Defence and the lessons being taken from its conclusion sounded like déjà-vu all over again: featuring an Israel that addresses political problems with military solutions and that wastes whatever quiet is achieved by refusing to take diplomatic initiatives. “[Israel] only wants to get time and waste it," noted Haaretz’s military analyst Amir Oren. "Israel is fleeing the necessity to define for itself where it wants to go. Therefore it moves in exhausting circles to bring it back to where it started."

Others have noted that this was partly about Netanyahu showing that the U.S.-Israel relationship was unchanged despite speculation following the unsuccessful Romney-Bibi-Adelson ticket. The Morsi bear-hug suggests the desire to reimpose the moderate—versus extremist—playbook on the changing Middle East. Israel’s respected senior columnist Nahum Barnea wrote in Yedioth Ahronoth today about “strengthening the moderate Arab bloc.” 

But an analysis that focuses too exclusively on continuity does a disservice to two important trends in Israel: that the Netanyahu-Lieberman axis does have its own thinking on the Palestinian question, and that Israeli politics has significantly shifted. Richard Haas was correct when he wrote in the Financial Times, “Israel has a choice: it can work to strengthen the secular leadership on the West Bank or it can work to moderate Hamas,” and he is correct in assessing that Netanyahu is doing neither. Haas, however, misses the point by refusing to acknowledge that Netanyahu-Lieberman have no interest in doing either because they have no interest in pursuing a solution that would seem decent or realistic to any neutral observer. They are not two-staters in any recognizable way.

From the perspective of an Israel transitioning away from even the make-believe pursuit of a two-state outcome, there is a certain internal logic to Netanyahu’s policies. Without wishing to attribute to the Israeli leadership too fully-formed a strategy, certain defining outlines are emerging. For instance, that Gaza’s hinterland should be Egypt rather than the contiguity of Palestinian inhabited territory, which includes Southern Israel (including the areas from where many Gazan Palestinians or their family originated), Jerusalem and the West Bank. If a Rafah crossing between Egypt and Gaza becomes the main entry or exit point between Gaza and the world, and if Gaza becomes “Egypt’s responsibility” (as many Israeli commentators today are suggesting), then Netanyahu can tick a box. It could be seen as an attempt to disaggregate a comprehensive Palestinian question—and, by implication, need for a solution—into a set of distinct and manageable files: the Gaza file, the Jerusalem file, the Judea and Samaria file, the Arab minority inside Israel file, and the UNRWA file. Each would require its own conflict management approach. 

The political shift to the right in Israel is well documented. While it is probably too early to assess the political and electoral impact of operation Pillar of Defence, initial observations should include the following: Netanyahu faced little or no opposition from the left to this escalation (the only Zionist party to display any discomfort was Meretz, with its 3 Members of Knesset, while Palestinian-Arab Members were united in their opposition). Some of Netanyahu’s so-called opposition from the center and left have even criticised him for not going far enough. The far right are more likely to gain some votes from the operation's fall out and from a public mood which had serious reservations about the ceasefire. Having been told by their politicians for so many years that there are military solutions, the Israeli public's lack of enthusiasm to the news that this is not so shouldn't be surprising. If Olmert does enter the race, his claim could be that he was strong enough to not flinch from entering Gaza during Cast Lead, but also courageous enough to engage in far-reaching diplomacy and negotiations with Abbas. It is hardly a flag for progressives to rally around.

4) In America too, old meets new 

At first glance, one could be excused for assuming that a magnifying glass would be required to identify anything but business as usual in Washington’s approach to managing this latest crisis. The standard, unwavering support for any and every Israeli action was on display. There were suggestions of even greater military assistance to Israel, and any notion that a ground invasion was somehow prevented by Washington’s intervention should be measured against the simple reality that Benjamin Netanyahu had very little interest in rolling that particular die during an election season. As ridiculous as it may have looked to have Secretary Clinton dash to Ramallah to visit with President Abbas in the midst of a negotiation to which he was not a party, it nevertheless provided a perfect snapshot of America’s reduced relevance in the changing region.

In fact, it was somewhat symbolic that President Obama conducted his telephone diplomacy during this crisis in the midst of a visit to Asia. America is not getting out of the Middle East any time soon—it is too addicted to arms sales to the Gulf, to its peculiar domestic calculations when it comes to Israel, and it is still too far from energy self-sufficiency or being able to fully restrain its interventionist instincts. But this is looking more and more like a period of transition or a pivot, not just towards Asia, but also toward relying more on outsourcing crises to reliable local (or not so local) problem solvers. That nascent process has come into view in Libya, Syria and elsewhere. On this occasion, Washington took something of a test drive in a new Egypt as a partner in problem-solving, and seems to have quite liked what it saw. What is interesting here from an Israel-Palestine perspective is that the three leaders and states emerging as problem solvers that America might have some confidence in working with in the Middle East— Erdo?an of Turkey, Sheikh Hamad bin Khalifa Al Thani of Qatar, and President Morsi of Egypt—all of them are closer to Hamas than Abbas, unequivocal in their criticism of Israeli policies, and none currently has a resident ambassador in Israel.

5) Denying Palestinian political realities just got (much, much) harder

Let’s keep this short. Hamas-run Gaza in the midst of conflict with Israel has just played host to the Secretary General of the Arab League, the Prime Minister of Egypt and the Foreign Ministers of Turkey, Iraq, Jordan, Lebanon, the Palestinian Authority, Qatar, Tunisia, Saudi Arabia and Sudan. Prior to this escalation, regional developments had obviously shifted in Hamas’s favor, including a visit to Gaza by the Emir of Qatar and the commitment to provide some $400 million. Hamas has again proven that it can create a degree of mutual deterrence with Israel, that it is taken seriously by Israel, and can bargain effectively with Israel, from securing prisoner releases to securing commitments barring IDF incursions into Palestinian territory, right back to claiming success in having driven Israel from Gaza. Just to rub it in, on the same day that the IDF was committing not to enter Gaza, its troops were busy conducting raids and arrests throughout the West Bank.

What’s more, Gaza is likely to witness more rapid economic growth than the West Bank in the next period, not only because there is a lower base to start from, but also given the likelihood of delivery of assistance commitments from Turkey, Qatar and elsewhere (initially for reconstruction—think of the rebuilding in southern Lebanon and Beirut neighbourhoods after 2006). The Palestinian balance has shifted, full stop.

Fatah and the PLO cannot be dismissed in Palestinian politics, but their longstanding approach of currying American favor, in the hope of delivering Israel absent the creation of Palestinian leverage and assets, has run its course. They appear to have missed the boat in leading a popular campaign of unarmed struggle and the PA’s security cooperation with Israel looks distinctly unseemly in the eyes of many Palestinians. Palestinian unity remains an obvious need but that is far from easy to secure. 

And a likely U.N. General Assembly vote on Palestine observer state status has in all likelihood been reduced to a sideshow. The diplomatic activity surrounding any U.N. event, the courting of European votes and the anticipated tug of war over what retaliatory action Israel’s government might take could receive a prominence out of proportion to its significance for the future Israelis and Palestinians.

6) A more complex military balance

Much time will be spent pouring over the details of the respective military successes and failures of each side, going well beyond the public spin on each side as to whether Israel backed down—fearing where a ground invasion might lead—or whether Hamas blinked first based on the reverse calculation. Kadima leader and former Defense Minister and IDF Chief of Staff Shaul Mofaz declared on Israeli radio this morning that Hamas had won this round. While it is not so simple, there is something to that assessment. Israel of course maintains an absolute dominance in the technological and fire-power arena. Israeli claims to have massively depleted the stockpile of long-range missiles in Gaza are almost certainly accurate. The Iron Dome defence system has also been heralded a success and achieved impressive results (and will no doubt become another eagerly sought after product in Israel’s arms export trade). The assassinated military commander Ahmad Jabari too will be a loss for Hamas, ultimately though joining the graveyards of other irreplaceable “heads of the snake.”

In the Hamas column, much will be made of the ability to have sustained the rocket fire on Israel up to and even a little beyond the entering into effect of the ceasefire deadline—and of course of having proven its claims of Tel Aviv being within its firing range (and Jerusalem, somewhat surprisingly from the perspective of Islam’s holy sites, not distance). In addition, as Yedioth Ahronoth's Barnea noted, Israel, uncharacteristically, seems to take greatest pride in its improved defensive rather than offensive capacity, commenting that “with all due respect to the Iron Dome system, there was something new and decidedly un-Israeli about the addition to protection.” 

Beyond the immediate hit-miss ratios, three bigger picture points are worth bearing in mind. First, Hamas has not become Israel’s security sub-contractor in Gaza. And we are not witnessing the Izzedine Qassam brigades morphing to becoming a new version of the PA security services. Haaretz editor Aluf Benn is a serious and deservedly respected analyst, but he has this wrong. Hamas is able to be many things including pragmatic and patient; it does, though, remain the Islamic Resistance Movement. It is not about to start sending its fighters on American-run and -financed training courses in Jordan. When its balance of interests calculation reads “pursue armed struggle,” it will do so. And it will continue to attempt to build a capacity to do so, including targeting innocent civilians in violation of international law, as it did all week. The restraints of Hamas action may have increased but they are not absolute.

Second, the idea of any future peace arrangements including a Palestinian agreement to demilitarization just became more remote. Although the prospect of any such agreement also appears rather remote, a future of Palestinian insistence on a military capacity is ultimately not a bad thing. Better an Israel that is restrained and limited to week-long operations like Pillar of Defence rather than a less-restrained Israel conducting months-long operations like Defensive Shield in the West Bank during the Second Intifada.

Third, the shifting regional picture also impacts the military-security equation. The narrative is shifting in ways Israel would be wise to pay attention to. In an increasingly and sadly sectarian Middle East, armed resistance is no longer the exclusive purview of what is perceived as an Iranian Shiite-led axis. We have now witnessed armed insurgencies that are backed by mainstream Sunni Arab states and their Western allies, notably in Libya and Syria. That Hamas is repositioning from a more Iranian axis orbit to a more Sunni axis orbit (Qatar, Turkey and Egypt) reflects this trend. Not to exaggerate or suggest this is around the corner, but more explicit support for the armed component of the Hamas struggle will become more difficult to obfuscate around and untimely deny. Abdel Bari Atwan—often a good bell-weather of regional opinion—asked in Al-Quds al-Arabi: “Why did the latter [Arab Leaders/Arab Foreign Ministers] not rush to offer anti-aircraft Stinger missiles to the resistance factions in the Strip to deter the Israeli air force? Or are these weapons prohibited from being used against the Israelis to protect the Muslim Sunni Palestinians?" 

7) The rest: Iran, Europe and the global fall out

This past week demonstrated that Europeans not only lack a coherent policy to the Palestinians; they are also missing such a policy vis-à-vis Israel. For four years since Operation Cast Lead, Europe has been unable to impact in a meaningful way the Gaza situation and has, largely inexplicably, maintained its policy of no political dialogue with Hamas. As we pick up the pieces from another crisis it is surely the time for a re-think on that front. It would also help Europe be a more useful partner in a changing region and indeed be more useful in American eyes (even if the Americans howl when the policy is first announced). Europe might then also be able to play a constructive role at the Egypt-Gaza border in Rafah with a revised E.U. Border Assistance Mission (EUBAM).

If the Palestine vote takes place at the UNGA, Europe should vote in favor not because of some mathematical computation of strengthening one Palestinians faction at the expense of the other, but rather because it is the right thing to do if Europe is committed to a two-state outcome. Europe might also be useful in utilizing some of the leverage it has with Israel as an outrider to an America still boxed in by its own politics. Now might be a good time to think if Europe can have an Israel policy as European instinctive support for Israel bumps up against its increasing inability to understand Israeli policies, as those in turn undermine European interests in the region, whether spilling over from the Palestinian arena or the threat of an Iran military debacle. 

Netanyahu may have re-introduced Iran into the picture in his ceasefire press conference, declaring that “virtually all the weapons [in Gaza] came from Iran,” but his past week was not primarily about Iran. Undoubtedly, that is where Netanyahu will now want to focus attention. Yes, the operation sent a message that Netanyahu is willing to undertake a major military operation (his first as Prime Minister), and sent various signals regarding the effectiveness of Iron Dome, the Gaza weapons stockpile and the Lebanon arena. Iran will of course have been drawing its own conclusions: that Hamas and to an extent Palestinian Islamic Jihad have other regional alliances, that Israel ultimately shied away from a major ground incursion, and that Egypt was able to act as an effective mediator to Israel with America’s blessing. It is worth noting that the Syria clash not withstanding, all three U.S.-allied regional problem solvers—Turkey, Egypt and Qatar—have channels to Iran. 

Finally, after appearing somewhat isolated on Syria, Russia and China will have enjoyed embarrassing the Americans and some Europeans this week at the U.N. Security Council over the Palestine issue by siding with Arab parties. It’s something they are likely to indulge again next week if the Palestinians go for a U.N. vote.