By Leslie Susser, The Jerusalem Report, 09.07.07

Critics on the right and left fear that Prime Minister Olmert might not be adopting the correct approach to the changed realities in Gaza
No sooner had Gaza fallen to Hamas than Prime Minister Ehud Olmert was presenting it as a great opportunity. The fact that the mid-June violent coup by the Islamists left radicals, who do not recognize Israel, in charge in Gaza and moderates, who do, in control of the West Bank meant that real peace negotiations could, at last, be renewed: The Gaza-West Bank split, Olmert argued, would enable Israel to negotiate with Palestinian President Mahmud Abbas of the secular Fatah in the West Bank, while ignoring the Islamist Hamas regime in Gaza. Moreover, in the prime minister's upbeat scenario, moderate Arab states like Egypt and Jordan, threatened by the spread of Islamic rule, would pitch in to create a more stable environment. And, with a little luck, progress in talks with the Palestinians could lead to negotiations between Israel and the entire Arab world over normalization of relations, as envisaged in the Arab League peace plan.
A four-way summit at the Egyptian resort town of Sharm al-Sheikh on June 25 seemed to support the prime minister's new thinking, with the main protagonists, Egypt's President Hosni Mubarak, Jordan's King Abdullah, Olmert and Abbas, coming across as the new peacemakers - without Hamas.
But does Olmert's analysis really reflect underlying realities? His approach, which some pundits describe as naive, raises a string of fundamental questions: Can Israel really hope to negotiate significant moves with the Palestinians, without Hamas? Can the West Bank and Gaza be treated separately over time? Will Hamas, egged on by Iran, allow progress in West Bank negotiations from which it is excluded? Might not Hamas overthrow Fatah in the West Bank, the way it did in Gaza? Will Egypt and Jordan play the positive role Olmert is hoping for? Will other moderate Arab states see the new situation as an opportunity to press forward on the Arab League initiative, or will they continue to hold back, unwilling to be seen to be making the running on anything to do with Israel?
Olmert's critics on the left agree that there is a new historic opportunity for peace. But they fear the prime minister won't go far enough to bring the moderates on board, and the chance will be squandered. Right-wingers argue that the fall of Gaza, far from opening up new possibilities for peace, clearly demonstrates the folly of the two-state approach, on which over a decade of Israeli-Palestinian peacemaking has been based. They maintain that the shock of the Hamas takeover calls for fresh strategic thinking and for much tougher tactics toward both Hamas and Fatah.
Middle East specialists also question the validity of Olmert's optimistic analysis. For example, they doubt whether Egypt and Jordan will be able to make a positive contribution and suggest that, ultimately, the government's policy of trying to isolate Hamas will prove untenable. In the days immediately following the Hamas takeover in Gaza, Olmert decided on a policy designed to create two very different Palestinian models: a thriving West Bank with a political horizon and a politically shunned Gaza, dependent on humanitarian aid. Abbas's West Bank would get freed Palestinian tax money, international investment and trade, prisoner releases, VIP cards to ease movement for politicians and businessmen, dismantling of roadblocks, renewed security coordination with Israel, armored vehicles to help maintain order and the promise of political progress. Gaza would get nothing, besides tightly controlled humanitarian aid. The idea, Olmert's confidants say, is not to create two separate Palestinian states, but to show Palestinians in the West Bank and Gaza that the way to statehood and a better life is though moderation, not terror. "We want to show that moderates can deliver tangible results," a senior official told The Report. "Ultimately, the idea is for the people in Gaza to understand that if they had a similar government it would deliver for them there too."
A second element of the new Israeli policy is to create further incentives for Palestinian moderation by defining the contours of a final peace deal. To encourage the moderates, Foreign Minister Tsipi Livni is pressing for negotiations on the core issues of a final peace deal now. "Israel must clarify with the Palestinians the possibility of reaching agreements on all the disputed issues," she declared in a late June address to the Israel Council on Foreign Affairs in Jerusalem. The idea is to reach agreement in principle, on questions like final borders of a Palestinian state, refugees and Jerusalem - even if the deal cannot be implemented yet. Livni argues that once the Palestinians are reassured about the kind of final peace deal on offer, they will have a strong incentive to take the steps they need to get there. For example, to disarm the militias and clamp down on terror. Olmert, while happy to talk final status, warns against actually closing a detailed "shelf deal" ahead of time. He argues that to do so could invite pressure on Israel to make further concessions when the time for implementation finally comes, and that a looser outline of principles should be enough to reassure Palestinian leaders about the size and kind of state to which they can look forward.
As further encouragement to Abbas and other Palestinian moderates, the Israelis hope to convince moderate Arab states, especially the Saudis, to take a more active peace-making role. The results, so far, have been disappointing. Israeli officials complain of Arab countries "that say very nice things in private," but fail to come out in public in support of Palestinian moderates or the peace process. The officials talk about "discreet meetings" with major Arab players, and wonder when they will agree to meet in the open. For example, the officials say, they would very much like to see other Arab countries, besides Egypt and Jordan - with whom Israel already has peace - joining the Arab delegation due in Israel in July to discuss ways of taking the Arab League initiative forward.
Despite the diplomatic flurry, Olmert's critics on the left and the right remain unconvinced. Left-wingers fear the government will preoccupy itself with relatively minor goodwill gestures, and fail to take the bold steps necessary to break years of deadlock. Meretz's Avshalom Vilan says the radicals are on a roll, and unless the government acts quickly and decisively to counter the Islamist wave, it will miss its chance. He says Olmert should negotiate a quick interim deal with Abbas, and, at the same time, open negotiations with Syria aimed at detaching Damascus from the Iranian axis. "There is a lot of Iranian money in all this. Therefore, I say we must talk to the Syrians to start neutralizing it," he says.
But, after the fall of Gaza, is the left's two-state solution, Israel and Palestine (West Bank and Gaza) living side by side at peace, still relevant? Gadi Baltiansky, director of the left-wing Geneva Initiative, which presents a highly detailed model for a final Israeli-Palestinian peace deal, says now more than ever. "For now we are talking about a state on the West Bank, and if Gaza will want to join later and accept the conditions of the agreement - recognition of Israel and so on - it will be welcome," he insists. "I think the very fact of progress towards a deal will force Hamas to change or grow weaker. Because if it doesn't come aboard, people in Gaza will say, 'This government does not suit us.'"

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