Central to improving the situation in Gaza and across Palestine is the need for an agreement that enables Fatah and Hamas to find a working relationship. For while undoubtedly Hamas has been damaged as a military force in this operation, it remains a political organisation with the support of a significant minority of the Palestinian people with a legacy of its 2006 parliamentary election victory. An agreement would not only bring greater stability to Palestinian society, it would provide the basis for a return of the Palestinian Authority to Gaza, an essential requirement for long-term peace and security between Israel and the strip. The bitter infighting in the wake of Hamas’ 2006 victory that lead to the schism between Gaza and the West Bank in 2007 was not only the result of inflexible positions of Hamas, Israel and Fatah combined with the clumsy nature of international community’s response which damaged Palestinians economically without undermining Hamas politically, it was also the result of a wider systemic problem within the Palestinian Authority. The PA’s strongly presidential system created for President Arafat, watered down at the height of Second Intifada under intense international pressure to enable Mahmoud Abbas to take up the newly created post of Prime Minister, which in turn provided a platform for Hamas to form a government lacks the necessary separation of powers to operate with competing parties controlling differing institutions. The situation is further complicated by the international negotiating role on behalf of the Palestinian people everywhere being operated through the PLO.

There is a pressing need to come up with a successor to the Mecca Agreement that briefly offered hope of reconciliation between the two parties in 2007. The agreement called for the creation of a national unity government and would have allowed Hamas to join the PLO while allowing President Abbas, as Chairman of the PLO to continue negotiating a long-term settlement with Israel on the basis of previous agreements. A new deal might enable fresh presidential and parliamentary elections to be held, a significant bone of contention between the two parties, with Hamas arguing that President Abbas’s term expires at the end of January. It may ultimately lead to Hamas being able to join the PLO, enabling final status negotiations to move forward on behalf of a unified Palestinian platform. An agreement could also limit the level of friction in future situations where the presidency and legislative council are split between the parties.

Not only is a new deal an important step to enable an eventual final status agreement, progress is needed now to enable the PA’s return to Gaza in some form which may well be a requirement of any ceasefire agreement. PA control of the border crossings, potentially alongside the return of EU monitors or a new international force if Egyptian and Hamas objections can be somehow be over come, is seen as an essential step to enable the regular opening of Gaza’s borders in the long-term. Furthermore as Israel understandably will not tolerate continued weapons smuggling at Rafah so the PA or international force in coordination with Egypt must have the necessary power to identify and destroy tunnels, which may only achievable in the context of a wider agreement.

There is an element of wishful thinking that the incoming Obama administration will completely transform US Middle East policy from its current chilling detachment. However expectations are high that the new administration will be significantly more engaged in pushing for a peace agreement and ensuring Israel pays greater attention to the humanitarian situation facing the Palestinians over the longer-term. Increased diplomatic pressure will be required to shape a political environment where the Israeli public is willing to accept the necessary steps on settlements and Jerusalem.

Until the recent conflict Israel seemed destined to elect a hard-line rejectionist block in elections due on February 10th headed by a rejuvenated Likud Party, led by former PM Benyamin Netanyahu one of the key contributors to the failure of the Oslo Process. The current conflict has boosted the chances of the Kadima-Labor coalition although a Likud victory remains the most likely outcome given the continued strength of the religious and ultra-nationalist parties.

Obama’s team will have to move hard and fast to make clear that the US will not welcome an Israeli Government that rejects or seeks to indefinitely postpone the creation of a Palestinian State. It must make clear it will not placidly accept further delay in reaching a final status agreement based on the ‘Clinton Parameters’ established in the final days of the last Democratic administration.

Although the Israeli public does not take direction from the White House it would help shape the political environment in the 21 days from the inauguration to the Israeli elections. While a fresh Kadima-Labor victory would give the new administration hope that progress could be made on final status issues, a hard-right coalition would require a more radical shift in US policy to achieve any discernible progress in the coming years. Whether the Obama administration would be willing to use US economic and military assistance as leverage to bring a rejectionist Israeli government to the table, a tactic last used meaningfully by George Bush senior in 1991, may prove one of the most important foreign policy challenges facing the new administration come February.