By Danny Rubinstein, Ha'aretz , 03.07.06

The government of Israel needs to decide whether its actions in the Gaza Strip also have a diplomatic significance. That is, whether the results of what is being done in Gaza will serve the country diplomatically, or cause damage - because what is now on the agenda is not only the fate of soldier Gilad Shalit, but rather the fate of the Palestinian Authority.

The events of recent years have very much weakened the Palestinian regime in the territories. A number of times in the past there was talk that PA was about to collapse, but it has survived. Today the situation is different: This is the fifth month now that the 150,000 employees of the PA have not regularly received their salaries, which represent the means of subsistence for about 1 million people. It is impossible to manage a country's treasury by means of messengers who smuggle in dollars in suitcases.

The Gaza Strip is under siege, as are a number of districts in the West Bank. Infrastructures in the Strip are being destroyed - including electricity, water, roads, bridges. Officials are saying that it will be difficult to rehabilitate the economy in the territories. Palestinian government ministers and members of parliament have been jailed and the prime minister's bureau in Gaza has been bombed. The impression that is being created is that the government of Israel is trying to exploit the deterioration in security in order to topple the Hamas government. It is not only Israel that wants it to fall: This is almost certainly the desire of a number of Arab countries and many in the international community. PA Chairman Mahmoud Abbas (Abu Mazen) and his colleagues in the Fatah leadership would also not be sorry if the Hamas government falls.

The problem is that the toppling of the Hamas government is liable to bring down all the PA institutions with it. This was discernible in the events of last weekend surrounding the arrest of the Hamas government ministers and members of parliament. In the wake of these arrests voices were heard in the Fatah leadership (such as those of MP Azzam al-Ahmad and Al-Hayat Al-Jadida editor Hafez Barghouti), calling for the establishment of an emergency government or national unity government. Under the Palestinian Constitution Abu Mazen can dismiss the Hamas government; colleagues who support this also think it could be a possible scenario with respect to Palestinian politics. After all, only a few days ago the leaders of Hamas and of the Fatah approved the so-called prisoners' document, one of the provisions of which stated that within two weeks a national unity government will be established. Why, then, wait two weeks and not do it right now?

The response of Prime Minister Ismail Haniyeh to this idea was one of fury. Unthinkable, he said, adding that any Palestinian government that will be established during the next four years must be based on the results of parliamentary elections. In other words, even if a unity government or an emergency government is established, Haniyeh and his people are demanding that they continue to head it. They are prepared to bring in ministers from the Fatah and other movements. But no more than that.

Nearly all of the Palestinian spokesmen have agreed in recent days that it is not possible that instead of Hamas' government, an entity will be established that will look like a government of collaborators that is coming into power riding on the backs of the Israeli tanks. In light of this reaction Mohammed Dahlan (who is accompanying Abu Mazen during his stay in Gaza) has denied that there is any intention to establish a new Palestinian government.

The conclusion from this description of events is that at this time, it is impossible to get rid of the Hamas government - and if this is attempted by force the entire PA will collapse.

From Israel's perspective, the continued functioning of the PA in the West Bank and Gaza is important. The alternative to the PA is chaos or the return of total Israeli occupation. It is difficult to assume that anyone in Israel wants this, because the security and diplomatic damage to the country in such a case would be grave indeed.

Therefore, there is no alternative but to enter into negotiations immediately, and of whatever degree of toughness is required, on the quid pro quo for the release of Gilad Shalit. There are many disadvantages to such negotiations, but the alternative is harsher and far more dangerous - both to the soldier's fate and to Israel's diplomatic and national interests.