The biggest threat to the PA is a fiscal crisis originating in its quixotic U.N. membership bid of September 2012, which produced a confrontation with its main donors, particularly the United States.

The PA requires approximately $1 billion in external funding annually. The biggest individual donor has been the United States, and the biggest collective one the European Union. As a result of the inevitable failure at the U.N. last year, aid to the PA from both has dropped to approximately half of its previous level. And half of the remaining American aid, $200 million, remains on congressional hold. Meanwhile, numerous Arab states have failed to meet their own pledges.

The result is that the institution-building program led by Prime Minister Salam Fayyad is paralyzed. Public employee salaries are being paid piecemeal, services cut and taxes increased. The cost of living has shot through the roof. All of this has killed the promise that responsible governance could provide a measure of hope at a time of diplomatic impasse. Palestinians can no longer reasonably expect improvements in their quality of life even if they have to wait for progress towards independence.

The inevitable consequence has been the destabilization and discrediting of the PA, and real questions about its stability and future. Angry public protests erupted a few weeks ago, and public-sector strikes are now set to resume. While the PA could improve its own crisis management, resolving the financial disaster requires international support and Israeli cooperation. PA Finance Minister Nabil Kassis returned from a recent meeting of the ad hoc donor liaison group to report virtually no interest in help.

The longer-term prognosis is crippled by Israeli restrictions. The PA doesn't control access and mobility into or within its own territory, lacks the ability to exploit the resources in or develop over 60% of the occupied West Bank, and faces severe restrictions on exports. Everything it does is subject to Israeli permission.

Meanwhile, Hamas is finally starting to reap the dividends of the Arab Spring. The recent visit by the Emir of Qatar, promising $400 million in reconstruction projects and the establishment of the first diplomatic mission to the Hamas government, is potentially a huge breakthrough in its national and international standing.

The visit is a subset of Qatar's strategy of projecting its regional influence by promoting Muslim Brotherhood groups throughout the Middle East (excluding Gulf Cooperation Council countries). Hamas can argue this significant achievement validates their arguments that the winds of change in the Arab world are blowing in their direction.

Hamas still hasn't gotten much out of the new Egyptian government of Mohamed Morsi, which recently sent a new ambassador to Israel and reaffirmed its commitment to the peace treaty. But Hamas argues that in the long run, the rise of Islamists in Egypt and the patronage of Qatar mean that even the blow of losing the alliance with Iran and its headquarters in Syria (which was the price for Qatar's largess) will ultimately strengthen its position regionally and among the Palestinians.

Hamas has been so emboldened by these developments that it appears to have reversed its policy of eschewing attacks against Israel, and its leadership in Gaza has made an open alliance with its former rivals in the Islamic Jihad party. The rise in Hamas's fortunes has also meant again unfurling the banner of armed resistance.

Hamas hasn't won yet, but if present trends continue it will be very difficult for the PA to fend off its further encroachment into the West Bank and ultimate seizure of control of the Palestinian national movement.

Is this what everybody wants? If not, policies need to change, and fast. For the West and Israel to starve, humiliate and strangle the PA, while Qatar, Turkey, Iran and even Egypt vie for Hamas's affections and seek to be kingmakers in Gaza, is producing precisely this effect. Hamas has myriad problems of its own, but the best thing they have going for them is the double whammy facing the PA of the defunding of its budget and institution-building program combined with the ongoing diplomatic impasse.

Hamas can argue it has a vision and a strategy, however implausible, and actual international patronage. Palestinian reconciliation eventually will come. The question is on whose terms. Right now, though momentum seems to have shifted decisively away from Ramallah and in favor of Gaza.

If the Israelis, Americans and Europeans prefer to deal with Hamas rather than Mahmoud Abbas and Fayyad, they need only continue their current policies. And if they then find themselves unhappy with a new Islamist-dominated Palestinian national movement, they can rest assured they sat by and watched it happen in real time, and did absolutely nothing to stop it.