Almost no one believes that putting Palestinians on a "diet" will make them more moderate or help to restart a political process with Israel. The diet—a term coined by Ariel Sharon's chief of staff, Dov Weisglass—refers to the US and EU policy of trying to cut off the Hamas government politically and financially so that it cannot pay the salaries of civil servants or function as a government.
The pressure is designed to give the new government no option but to accede to three US and EU demands: recognition of Israel, renunciation of violence, and acceptance of all earlier agreements dating back to the Oslo accords signed by the late Yasser Arafat, leader of Hamas's rival Fatah movement.
Privately, most EU officials doubt the policy will work. But they feel trapped into adopting a position from which they lack the leadership or energy to escape, and the paralysis caused by the European divisions over Iraq still haunts Brussels in any area that risks a breach with the US.
Some very senior US officials, however, are more than ready to make plain that the US is not interested so much in Hamas's transformation to non-violence as in the failure and collapse of the Hamas-led government. US diplomats have told their European counterparts that "the Palestinians must suffer for their choice" (in electing Hamas). They would like to see Fatah return to power, albeit led by someone like the westernised Salaam Fayad, a former Palestinian finance minister and World Bank official.
To this end, the US is seeking to build a militia of 3,500 men around the office of the Palestinian president, Mahmoud Abbas, to enlarge the presidency staff and to channel as much of the expenditure and work of the government as possible through the presidency. The US aims to create a shadow government centred around the president and his Fatah party as a counterpoint to a financially starved Hamas-led government—which will, US officials hope, prove ineffective and wither. Officials associated with Vice-President Cheney's office talk openly with Fatah visitors about the desirability of mounting a "soft coup" that will restore the more pliant Fatah to power on the back of a humanitarian crisis.
In Beirut in early May, I spoke to Osama Hamdan, Hamas's chief representative in Lebanon and a senior member of the Hamas political committee, about the situation facing the organisation: "Before the US or Europe had time to judge us by our actions, US pressure for building a siege had begun," he said. "Initially, the new government made good progress in finding replacement finance from Arab and Islamic states, but subsequently there has been huge pressure exerted by the US on the Arab banking system in order to block others from transferring any funds by the commercial banking system to any bank in Palestine. People will suffer. In addition, Israel is withholding Palestinian revenues and tax receipts amounting to some $60m per month, and is restricting border access. These actions are endangering the survival of the internal Palestinian economy."
Hamdan explained that the government knew that the bloated state sector needed to be reduced in size and corruption eliminated—two measures that would cut the budget significantly. Hamas, he noted, had already offered the EU transparency of all government expenditure and a willingness to submit its accounts to independent audit. Palestinians, in his view, needed to be more self-reliant, both economically and in finding a solution to the creation of a Palestinian state. The problem, he said, was how to move from heavy dependency on European funding to greater self-reliance without creating more unemployment among the Palestinian Authority's 160,000 employees, none of whom have been paid for two months. About a quarter of the Palestinian population of 3.9m depends directly or indirectly on these salaries. Hamas does not want to swap dependency on Europe for dependency on Arab governments, but neither can the government move towards greater self-sufficiency without some bridging finance.
On current trends, the World Bank forecasts that by the end of this year 67 per cent of people in the Palestinian territories will be living in poverty (defined as less than $2 per day)—up from 44 per cent in 2005. Hamas's first priority is to pay the salaries of government employees, but it has also been looking to Arab states to fund projects, such as building social housing in Gaza, that could soak up surplus public sector workers. Its problem is that, despite having secured pledges of finance from alternative Islamic sources, it can find no bank willing to undertake the transfer for fear of legal action by the US treasury.
On 10th May, the "quartet" (the US, EU, UN and Russia) agreed to provide limited emergency assistance to the Hamas government, to be channelled through a mechanism that the EU agreed to propose. This initiative, although welcome to Palestinians, is unlikely to do more than keep institutional collapse at bay. It will not resolve Hamas's inability to transfer the funds the government has raised from Arab and Islamic states. It will also channel the assistance via the Fatah presidency rather than the Hamas-led ministry of finance, thus perpetuating the tensions between the rivals.
Originally, the US and EU argued that they had a moral duty to ensure that no funds raised from their own taxpayers reached a government they categorised as "terrorist." Now it seems they are extending the argument to include monies from Bahrain and Qatar. But have the US and the EU thought through the consequences of a complete Palestinian institutional collapse?
Hamdan was not worried that the crisis might turn Palestinian opinion against Hamas. Recent polls have shown the movement? increasing its popularity by 5 percentage points since the January election, with Fatah slipping by 3 points. Hamdan said: "People know it is not Hamas that is working against them, that the pressure is coming from Israel and the US. Equally, they understand the part played by a minority of Palestinians who do not accept the reality of change through a democratic process."
The crisis has created an unprecedented workload for the external leadership that has left them with little time to reflect on long-term strategy. The political committee, based in Beirut for security reasons, remains responsible for overall policy, with the cabinet in Ramallah enjoying reasonably wide autonomy within the guidelines laid down by the committee and the election platform. Initial tensions between the committee and the cabinet seem to have passed, but it would be no surprise if they returned.
The focus is now survival. Hamdan describes why the US policy of channelling assistance to Abbas alone is so damaging: "Trying to create a parallel government threatens to undermine all Palestinian institutions. A failure here could damage the whole situation. No one will know which is the real government—each side will blame the other. There will be no Palestinian side, just two warring rivals. The impact of this internal conflict will not be confined to Palestine—it will affect the whole region."
Cynics may suggest that Israel has nothing to lose from internal Palestinian conflict. In practice, however, it seems that many Israeli officials are not keen on the US hardline objective of trying to return Fatah to power because they believe it to be fragmenting into personal fiefdoms. Not for the first time, we see the US being more Israeli than the Israelis.
The Palestinian president and some of the Fatah leaders are busy advocating to Israel the prospect of a "quickie" six-month negotiation on all final status issues related to a Palestinian state. The outcome would be put to a referendum of Palestinians, effectively bypassing Hamas and the government. President Abbas is convinced that the "peace majority" of Palestinians would endorse it wholeheartedly.
But it seems Israelis are not convinced that Abbas, whom they regard as weak, can deliver on any agreement. They are less sure than Abbas that Palestinians would endorse any proposal that Israel would be likely to offer him. Indeed, Israelis are not convinced that they want a Palestinian partner at all. The public mood is one of unilateralism. The new prime minister, Ehud Olmert, will have a sufficiently difficult time persuading his coalition colleagues—particularly Shas, the Orthodox Jewish party—to proceed with unilateral withdrawal. There is little appetite for final status talks, and not much popular enthusiasm even for Olmert's plan to finalise the borders of Israel on the back of a partial withdrawal from the West Bank. Many Israelis feel that even if the US endorsed a partial withdrawal to a "final border," such a declaration would have no real legitimacy. They expect the world at large would reject it.
After the withdrawal from Gaza last year, I talked to a number of veteran Israeli political correspondents. They were saddened that, after the trauma of uprooting settlements, nothing seemed to have changed for the better: there was still violence in Gaza, Qassam rockets were landing in Israel and Palestinians seemed no more ready to acquiesce to the Israeli objectives for a limited Palestinian state. These commentators were sceptical that limited withdrawal from the West Bank really would transform their country's strategic position.
It seems, however, that the new Israeli government will aim towards partial independent withdrawal from the West Bank, for the time being at least. And for this, Israel prefers Hamas to Fatah. To engage with President Abbas would undermine the claim that unilateralism is necessary "because there is no Palestinian partner." Unlike Fatah, Hamas does not want to negotiate on a partial solution, and can be plausibly labelled "a non-partner." As a result, some Israelis perceive Hamas as sharing a common interest in Israeli withdrawal that could lead to some "understandings." And as Israel knows, Hamas counts all Israeli departures from Palestinian land as a victory, especially without a quid pro quo.
This prospect would leave Hamas to concentrate over the coming year or two on its core objective of providing competent governance to the Palestinians. Osama Hamdan underlined the importance of bringing law and order to the Palestinians and, specifically, of resolving clashes between Hamas and Fatah factions: "Ismail Haniya [the Palestinian prime minister] has begun working… there are good signs that he will succeed in securing the internal situation. Some of the other groups, such as the popular resistance committees, have begun working directly with the interior minister, and a new co-ordinator of security, who is very popular and commands wide support among all factions, has been appointed."
According to Hamdan, Hamas's other priorities are to reform the security services, to create effective judicial oversight over the security agencies and, above all, to make parliament accountable for and the instrument of control of all Palestinian institutions and ministries. Hamas has not perpetrated any direct attack in Israel since late 2003; its military wing has focused instead on targets within the occupied territories. For over a year, Hamas has observed a unilateral de-escalation, or tadiya. The suicide attack in Tel Aviv in April that led to the death of 11 Israelis was mounted by Islamic Jihad in response to an earlier killing of several of its leaders. In a response that was widely criticised, Hamas spokesmen refused to condemn Islamic Jihad, repelling any tentative European feelers towards engagement. But Hamas wanted to signal clearly that it would not be Israel's policeman in the territories. It had learned from Fatah's experience that to publicly condemn such attacks was to invite US and Israeli pressure to arrest members of Islamic Jihad, something it was not ready to do given the risk of being outflanked by more militant groups. Hamas also knows that if it begins to arrest Palestinians, Israel will send lists of further Palestinians to be arrested. These lists, which were sent to Arafat as soon as he took office in 1993, proved deeply corrosive to Fatah's credibility and legitimacy. The language used by Hamas, however, was not well chosen. Israel may have understood the signal, but externally it was damaging.
Hamas and Fatah represent two very different traditions of Muslim thinking. Fatah has looked to the international community to help balance the asymmetrical relationship with Israel, whereas Hamas's Islamist approach relies on the inner resources of its constituency for the fortitude to persevere. But contrary to the popular view, Hamas does not believe in imposing Sharia law on Palestinians, or anyone else. This has been said publicly. It does not seek a "top-down" Islamic state that imposes norms of Islamic behaviour but has no real Muslims living in it. It prefers the goal of a state peopled by believing Muslims whose freely chosen priorities colour society from below.
If Muslims judge Hamas to have been successful, this approach will change the face of Islamism. It will do more than any other initiative to swing the pendulum away from the revolutionary groups that aim to radicalise and to impose strict Islamic structures. And the commitment to reform will appeal to public opinion throughout the region. It is this that represents the revolutionary nature of the Hamas electoral victory and explains the antagonism of leaders like Mubarak of Egypt and King Abdullah of Jordan, who can see the implications only too clearly.
It seems likely that Hamas will continue to refuse to recognise Israel, at least until the final shape of an agreement is clear, but it will be pragmatic in signalling that it seeks a state on land occupied in 1967 and is not pursuing any destruction of Israel. Marwan Barghouti, a Fatah leader, and Sheik Natche of Hamas, both in jail in Israel, have signed a joint statement indicating that a future Palestinian state would be based on the lands occupied in 1967 only.
Western policies are in difficulties throughout the middle east. The west responds to this situation by largely refusing to talk with the fastest growing current in the middle east, the Islamists. But the EU should heed the words of Efraim Halevy, former adviser to Ariel Sharon and a former Mossad head. He recently criticised Israel for insisting that Hamas first recognise the Jewish state as a precondition for any discussion. Halevy argued rather that Israel should recognise Hamas first. He predicted that in so doing, "we will be seeing things we have not seen before"—an apparent allusion to talks between Israel and Hamas. That would be a good start.
