Throughout years of uprising and Israeli military actions, siege of West Bank cities and President Arafat’s de facto house arrest, it was hard to imagine the situation getting worse for Palestinians. It has. On all fronts – Palestinian/Palestinian, Palestinian/Israeli and Palestinian/ international – prevailing dynamics are leading to a dangerous breakdown. Subjected to the cumulative effects of a military occupation in its 40^th year and now what is effectively an international sanctions regime, the Hamas-led Palestinian Authority (PA) government cannot pay salaries or deliver basic services. Diplomacy is frozen, with scant prospect of thaw – and none at all of breakthrough. And Hamas’s electoral victory and the reactions it provoked among Fatah loyalists have intensified chaos and brought the nation near civil war. There is an urgent need for all relevant players to pragmatically reassess their positions, with the immediate objectives of:

• avoiding inter-Palestinian violence and the PA’s collapse;
   
• encouraging Hamas to adopt more pragmatic policies rather than merely punishing it for not doing so;
   
• achieving a mutual and sustained Israeli-Palestinian ceasefire to prevent a resumption of full-scale hostilities; and
   
• preventing activity that jeopardises the possibility of a two-state solution.

Of all the dangers threatening the Palestinians, the most acute may well be internal strife. Facing one of the most hostile external environments in its history, the national movement also confronts one of its most acute domestic crises. Even as Hamas and Fatah leaders repeatedly profess their determination to avoid violent conflict, they act in ways that promote it. Fatah, unable to digest its electoral loss, is behaving as if still in power. It treats the new government as a usurper, blatantly subverting its ability to govern, relying on its partisans’ overwhelming presence throughout the civil service and, especially, the security forces. Hamas, unprepared for its triumph, is behaving as if it remains in opposition. It invokes steadfastness as a substitute for policy and has proved incapable so far of adjusting to its new status, while introducing provocative measures of its own.

In this increasingly bloody power struggle, both camps (as well as the myriad camps within camps) are mobilising armed militias, stockpiling weapons, resorting to killings and spreading bedlam. The latest move was political. Mahmoud Abbas, PA President, Chairman of the Palestine Liberation Organisation (PLO) Executive Committee and Fatah Deputy Chairman, on 25 May 2006 threatened that if Hamas did not accept within ten days a proposal signed by a number of Israel’s most prominent Palestinian detainees – the Prisoners’ Initiative – which implicitly endorses a negotiated two-state solution, he would submit it to a popular referendum. Making good on his ultimatum after a short extension, he issued a presidential decree on 10 June calling for a referendum on 26 July.

The result has been an increasingly bitter, and perilously violent, relationship, bringing the Palestinians to the brink of internecine conflict. The National Dialogue that was launched in late May to forge a political consensus appears to be as much about partisan posturing as about strategic compromise. While Abbas understandably is averse to interminable negotiations, his determination to hold a referendum opposed by Hamas carries a serious risk of further polarisation and violence – the very outcome that, by seeking to bring the Islamists into the political arena, he had tried to avoid. Today, the situation is but one tragic step – the assassination of a senior Fatah or Hamas leader, for example – from all-out chaos.

Faced with the intensifying inter-Palestinian struggle, the calculus of the Quartet – the U.S., EU, Russia and the UN, who have been in charge of the disappearing peace process – and other outside actors has been simple: pressure the government, count on popular dissatisfaction with its (non-) performance and find ways to strengthen Abbas and ensure the Hamas experience in power comes to a rapid and unsuccessful end. The approach comes in different variants, from the more confrontational (seeking to subvert the Hamas-led government through political and economic isolation), to the more subtle (hoping to circumvent the government through Abbas’s empowerment). Yet in both cases outside actors, by openly bolstering one faction against the other, exacerbate internal strife.

Of late, limited signs of pragmatism have come from Washington regarding the need to prevent collapse within the occupied territories. However, the U.S. still appears reluctant to endorse a European proposal to fund priority social sectors while bypassing the government or at least wishes to postpone implementation of such a mechanism until after a referendum is held and the political context altered. The tightness of the grip aside, all, including Israel and even Arab states, appear convinced that squeezing the government unless it meets the Quartet’s three demands (recognition of Israel, renunciation of violence, and acceptance of past agreements) is the best way to end its tenure and accelerate the restoration of its more pragmatic predecessors.

There are important elements of Hamas’s ideology and charter, including its refusal to recognise Israel and the call for its destruction, that are incompatible with the international community’s principles for a resolution of this conflict as well as the views of most Palestinians; pressure certainly needs to be brought upon it to change these. Without this necessary evolution, it cannot expect international recognition, nor can the government it leads expect genuine international support. But the approaches currently being applied or contemplated – to deprive it of resources, isolate or bypass it, force a referendum, or even stage early elections – suffer from the same fundamental flaws: the absence of a day-after strategy and an almost total disregard for Hamas’s very recent democratic mandate as well as the longer-term consequences of short-term success.

Feeling cheated of its right to govern, Hamas would be unlikely to go quietly. Having reached the conclusion that its experiment in the mainstream has failed and political integration is no longer a viable option, and with its back against the wall, Hamas almost certainly would revert to internal violence or violence targeting Israel, causing maximum chaos, possibly bringing down the PA and allowing the Islamists to re-emerge as a resistance movement. The recent mutual escalation of violence with Israel shows how perilous this situation quickly can become. Nor should one expect poverty and despair to encourage the Palestinians toward greater moderation; those are the very conditions that helped propel Hamas to power in the first place, and it is difficult to imagine how they could assist Fatah in the near future. Regionally as well, the engineered failure of the first elected Sunni Islamist government could have unwelcome repercussions, buttressing jihadi Islamists at the expense of their more political counterparts.

Starved of resources, confronting an increasingly hostile population and unable to realise its agenda, Hamas may well fail. But with widespread violence, chaos and a collapse in Palestinian institutions, it quickly would become hard to chalk up its failure as anybody’s success. Instead, what is required today is a more sophisticated, nuanced approach, pursuing the priority objectives described above with the specific policies summarised below.

Jerusalem/Amman/Brussels, 13 June 2006