Hamas's success in fighting a two-front war in Gaza against Israel and Fatah has given new urgency to calls in Israel for the military to retake large swaths of Gaza to clip the wings of the Islamic militants' recent ascendancy.
But after Israel's cabinet passed up proposals for a broad ground offensive in Gaza – instead opting to step up airstrikes aimed at militants – some are suggesting Israel should rethink its ban on dealing with the Islamist-led Palestinian government with a more pragmatic engagement strategy.
The factional fighting that killed more than 40 Palestinians over the last week appeared to indicate Hamas's military superiority over Fatah in Gaza. But, coupled with the collapse of a months-long truce with Israel, it's also raised concerns about the implosion of the Palestinian Authority.
"The government of Israel has been pursuing a policy for 14 or 15 months that has been ineffective: a choice between toppling Hamas or changing their ideology," says Gidi Grinstien, president of the Reut Institute, a Tel Aviv think tank. "Right now it's pretty messy and it's unclear what will come out of this confrontation, but I believe the reassessment has been essential for quite a while."
After a year of trying to isolate the Hamas-led Palestinian Authority with the help of the US and Europe by holding recognition of the Jewish state as one of three conditions for lifting the ban, Israel is moving aggressively against the Islamist militants. On Monday, Israeli airstrikes killed five militants as it continued its campaign against Palestinian rocket squads.
The fear, some observers warn, is that the Hamas-Fatah "unity" government could be the final prop of central authority in Gaza.
Israel's strategy of stepping up attacks on Hamas leaders and military targets, while inflicting punishment for a barrage of more than 150 rockets fired into southern Israel in one week, risks accelerating the power struggle within Gaza. The internecine fighting in Gaza has, for years, sapped the efficacy of Palestinian self-rule established by the Oslo accords.
But as bad as it is for Israel to do business with the Hamas-led government, observers argue, the collapse of the Palestinian Authority in Gaza would be worse.
The devolution of the self-rule regime could saddle Israel with a humanitarian crisis at its doorstep. It might also compel Israel to reestablish the same costly military rule over the impoverished strip of 1.4 million Palestinians from which it disengaged in August 2005. It is likely to leave power in Gaza dispersed among different militias, complicating Israeli policy toward Palestinians.
"Hamas and the Palestinian unity government, as long as the latter still holds up, are the best address Israel has at the moment," wrote Zvi Barel on Sunday in the Haaretz newspaper. "This government is not just the only one that has the potential to control the 'State of Gaza,' it is the only one that is still interested in the fate of its public and, therefore, is influenced by the pressure of that public." Mr. Barel wrote. "But without the means to provide benefits for [Gaza's] citizens, it is also paralyzed."
An unsuccessful assassination attempt on Hamas parliament member Khalil al-Hayya – an attack that killed at least eight people on Sunday – was intended to escalate Israel's response to missile fire from Gaza.
But even after missile strikes killed up to 32 people since Thursday, many Israelis suspect that only a broad military incursion can cripple Hamas's military capabilities.
Israeli Prime Minister Ehud Olmert found himself under new pressure this week to order such an operation when Strategic Threats Minister Avigdor Lieberman threatened to pull his party out of the coalition if the government didn't decide on a "bold" operation to "dismantle" Hamas.
But from the outset of the current round of violence, Mr. Olmert has been handicapped by the political fallout of last summer's war. With his government coalition buckling under a scathing report on his handling of the month-long battle with Hizbullah, Olmert can't rely on public backing for a ground offensive that is expected to include many casualties.
Almost alluding to the criticism leveled in the report on Lebanon, Shlomo Brom, a retired brigadier general, warned Israel's political leadership against choosing unrealistic goals in the fighting against Hamas.
Israel "needs to examine the degree to which its unwillingness to work with the Palestinian government … contributed to the recent deterioration," wrote Mr. Brom in a position paper published by Tel Aviv University on Sunday.
Indeed, the trauma of the Lebanon war is shaping the way Israelis view the current battle with Hamas. Like Hizbullah, Israelis fear that Hamas is in the process of upgrading its ability to strike at cities deeper into Israel and obtain better arms to defend themselves.
Ashkelon, a major Israeli city located about 10 miles from Gaza's northern border, has absorbed sporadic missile fire in recent years and is preparing for larger attacks. "It will come. It's a matter of when and how many," says Alan Marcus, director of strategic planning for the city. "If they can hit Ashkelon, they can hit within a big radius." The Israeli army, he says, should push the militants so they are out of range of large Israeli cities.
In a further indication of how the war last summer in Lebanon affects current Israeli thinking, officials are now considering the deployment of a multinational force along Gaza's border with Egypt – a move that would mimic the security arrangements following Israel's withrawal from southern Lebanon.
"When we agreed to the expanded UNIFIL [United Nations Interim Force in Lebanon] role in Lebanon, it was a change in a longstanding position that was very cautious about international forces at our borders," says a foreign ministry official who asked to remain anonymous. "UNIFIL has some successes."
Getting UN backing for such a force in Gaza, however, would probably require political dialogue with Hamas. That shouldn't bother Israel, argued Doron Almog, a reserve general who used to head Israel's Southern Command. Israel and Syria have kept their border quiet for three decades, despite what remains a technical state of war between the nations.
"There is a dominant reality in the territories. Hamas is the ruling power. We can't ignore that fact," Mr. Almog said Sunday in an interview with Israel Radio. "The question is whether, through a combination of military and political means, we can reach a long term ceasefire agreement."