As a new round of direct talks between Israelis and Palestinians gets underway at the urging of the United States, the continuation of Washington’s unsuccessful policy toward Gaza risks sabotaging diplomatic efforts. U.S. policy on Palestine aims at isolating Hamas, and therefore Gaza, in pursuit of two goals. First, the United States hopes to broker a deal between the Palestinian Authority (PA) leadership and Israel that would return control of Gaza to the PA. Second, it hopes to undermine Hamas’s ability to govern, on the assumption that Hamas’s failure will undermine its support in Gaza, thus facilitating the reintegration of the West Bank and Gaza under the control of the Palestinian Authority controlled by Fatah.

But a close look at Hamas in Gaza suggests that this policy has little chance of achieving either objective in the foreseeable future. Hamas has managed to provide a modest degree of governance in Gaza and shows no sign of imminent collapse. It also retains some support in Gaza and, as importantly, among residents of the West Bank. Indeed, it is clear that Hamas has enough control in Gaza and maintains sufficient support that it could prevent a popular referendum on a peace settlement from being held—should an agreement be reached between Israel and the Palestinian negotiators.

The Situation in Gaza

A modicum of governance

Contrary to U.S. and Israeli expectations that Hamas would be unable to govern Gaza, it has succeeded in establishing a degree of governance.

Palestinians universally credit Hamas for two accomplishments: restoring the judiciary and improving security internally. These two elements of governance have been well received by the population because they make a semblance of normal life possible.

Many Gazans also credit Hamas for at least trying to restore other government services. Health services, for example, are insufficient, but Gazans attribute the organization for having eliminated the corruption that plagues them.

Success in re-establishing administration and some services is particularly remarkable as Hamas has few sources of revenue. It receives almost no international assistance—which bypasses Hamas and only provides humanitarian aid to the population—with the exception of Iranian funding. Instead, Hamas imposes taxes on the limited supplies of goods coming in legally from Israel as well as on the illegal goods being smuggled through the tunnels dug under the boundary between Gaza and Egypt. Cash is also being smuggled directly through the tunnels by Hamas. However, in the last few months, Egypt has succeeded in cutting off this source. As a result, this revenue is no longer sufficient to pay Hamas employees and to provide services.

The easing of the economic blockade that followed the flotilla incident in May has introduced some new elements that affect Hamas’s ability to administer the territory. International pressure convinced Israel to ease the blockade, moving from a system in which all goods were forbidden entry into Gaza unless specifically exempted to one in which all goods are in theory allowed unless specifically forbidden. As a result, a wider range of consumer goods is now flowing into Gaza, reviving a small portion of the paralyzed private sector.

The freer flow of goods has eased pressure on Gazans to a certain extent, but has also forced both the private sector and Hamas to reconsider their survival strategies. Businesses that thrived under the harsher blockade by smuggling basic commodities that are now imported legally have turned their attention to smuggling still-banned goods. Hamas is imposing taxes on both the new legal imports from Israel and on specific smuggled items from Egypt. It hopes Israel will eventually allow cars through the blockade, allowing it to boost revenue even more from taxes, customs duties, and insurance fees.

Despite the easing of the blockade, Gaza continues to suffer from serious economic problems, with more than a third of the population still unemployed. For the economy of Gaza to truly revive, the blockade would have to be modified in more fundamental ways.

First, Gazans would need to be able to import construction materials and raw materials freely. But construction materials are still banned except when required for UN projects, and the flow of raw material is minimal. While Israel is now allowing some raw materials to enter Gaza, the amounts are small and the impact minimal.

Second, Gaza businesses should be allowed to export, because the domestic market is too small to allow them to increase production substantially. Upcoming reconstruction projects by the United Nations Development Programme (UNDP) and the UN Relief and Works Agency (UNRWA) will no doubt boost employment in Gaza temporarily, but will not provide a longer-term solution.
Despite its limitations, the increased economic activity generated by the easing of the blockade has alleviated the hardships of daily life for Gazans and thus decreased political pressure on Hamas. Goods are now available in Gaza, although only some segments of the population can afford to buy them: businesspeople in the formal and informal economies and the smugglers; former civil servants of the Palestinian Authority, who still get their paychecks from the West Bank although they are under orders not to work as long as Hamas is in control; Hamas’s own employees and those of international aid agencies; and the many Gazans who receive remittances from family members overseas. Everybody else is completely dependent on support from the UNRWA, from international non-governmental organizations (NGOs), and from Hamas.

Mixed Attitudes Toward Hamas

Gazan society is divided about Hamas and Fatah. One part of society is frustrated with Hamas because of the siege. “If they can’t govern and are not internationally recognized, why let them remain in government?” ask these people. “Why let the world punish us? The Palestinian Authority was a corrupt gang of thieves, but at least then we had a life and an economy thanks to the crossings.”

Another part is sick of both Fatah and Hamas for failing to govern effectively: “They failed us. They divided us. But the sad part is there is no alternative. We long for the days before Hamas, before the Palestinian Authority. Israel controlled every aspect of our lives as they do now, but at least they fed us with their economy. There were no checkpoints. All of this came after Oslo.”

A third part sympathizes with Hamas because they feel the group is unfairly discriminated against. “They never got a chance to govern,” these people say. “The world is against them, because they preserve the option of resistance and because they’re Islamic.”  This segment of society views Hamas as pristine and disciplined.

It is unfortunately impossible to estimate with any degree of accuracy how many Gazans fall into each category, because polls are unreliable and often manipulated. Nevertheless, there seems to be no evidence pointing to a massive rejection of Hamas and a corresponding upsurge of support for Fatah, as the United States and Israel hoped. Rather, Gazans remain extremely divided. 

Looking at the Long Term

Hamas’s Political and Military Strategy

At present, Hamas seems able to “muddle through” in its efforts to govern Gaza. At the same time, the present situation is untenable in the long run. What does Hamas want in the future?
According to its charter, Hamas seeks to regain all areas of what used to be Palestine. However, it has shown signs of being flexible on this objective, even before the second intifada, a period of intense Israeli–Palestinian violence in 2000.

While refusing to recognize the state of Israel explicitly, Hamas leaders hint they might recognize it implicitly with their hope for a long-term truce allowing the formation of a Palestinian state within the 1967 borders with East Jerusalem as its capital. The idea of a state within the 1967 borders, rather than on the entire territory that was once Palestine, implies an acceptance of the state of Israel in the remaining parts of mandate Palestine, including West Jerusalem.

Recent statements by Hamas leaders confirm the potential for flexibility. As Hamas leader Khaled Mishal said, “Hamas is willing to be part of the solution.” A Hamas member of Parliament added, “I accept the need to be a part of the international community. There is progress in the movement. The world must evaluate us based on our actions, not on a charter that was written and published in the past under different circumstances.”

Hamas’s military strategy also reflects a willingness to accept the reality on the ground.  “Resistance is a method, not a goal, and the how, when, and where are determined in such a way as to serve our national interest,” said a Hamas member of Parliament. Hamas has stopped firing rockets into Israel and does what it can to prevent other groups from doing the same, though it remains committed to resisting any Israeli incursions into Gaza.
The new strategy may be more the result of necessity than of ideological conviction. Rockets provoke Israeli retaliation and prevent Hamas from achieving its goal of international legitimacy. Furthermore, Israel now retaliates against attacks from Gaza with broad operations that inflict pain on the entire population, rather than by just targeting Hamas leaders, as in the past. Operation Cast Lead carried out in December 2008/January 2009 is the most far-reaching example of the new approach.

As a result, the people of Gaza are pushing Hamas not to provoke Israeli interventions and Hamas’s political leadership—aware of their suffering from the siege and also fearful of losing political support—has agreed. The military wing has complied, although it is not able to stop all attacks from Gaza by other radical organizations.

A Hamas attack against Jewish settlers on the West Bank, which left four dead on August 31, raises the question of whether Hamas is reconsidering its tactics in the West Bank. With the attack, Hamas sent a strong message that it still exists on the West Bank, remains part of the game, and cannot be excluded—the same message it sent during the Oslo process.

The Continuing Stalemate

Although Hamas has hinted repeatedly that it is willing to be flexible, it has not taken any concrete steps so far—at least in part because nothing in the attitude of the United States, Israel, or the European Union has encouraged and rewarded signs of flexibility. As a result, Hamas remains a pariah organization, one the international community would like to see wither away while a reformed Fatah re-establishes control in Gaza.

Hamas is well-implanted within Gaza, however. It has established an administrative structure (albeit a tenuous one) and maintains support. Fatah, too, has its supporters in Gaza, but it has no leadership role and no control. In the West Bank, the relative positions of Hamas and Fatah are reversed. Hamas has supporters there, but it cannot operate; in particular, it cannot conduct any operations against Israel without incurring the wrath of the Fatah security forces. At the same time, as a recent analysis by Nathan Brown (add reference) points out, Salam Fayyad’s government appears to be facing major difficulties in its goal of creating institutions to prepare for a new Palestinian state.

The picture emerging is Gaza and the West Bank thus is very different from the one envisioned by U.S. and Israeli policy makers. Hamas is not fading away in Gaza, but is muddling through despite serious economic difficulties and only a skeletal administrative apparatus. The Palestinian Authority is not building strong state institutions, as it was expected to do. Despite the large amounts of financial and technical assistance it has received, it has only developed a weak system and still competes with Hamas for support.

Implications for U.S. Policy

The assumption on which U.S. policy toward Gaza and the West Bank is based—that support for Fatah and the isolation of Hamas would lead the former to prevail and the latter to wither away—is proving overly optimistic and a change of policy is needed. The United States should continue to direct aid toward building economic and administrative infrastructure in the West Bank, because a Palestinian state will require it.

But the United States should stop trying to isolate Gaza politically and, more importantly, stop trying to undermine it economically, because a viable Gaza is also crucial to the future of a Palestinian state. It should seek instead to revitalize Gaza’s private sector by leaning on Israel to permit the importation of vital construction supplies and raw materials.

A stronger, more economically viable Gaza would help the United States attain its goals whether the peace negotiations succeed or fail. By including Gaza in the effort to develop the Palestinian territories, the United States would help to create a viable Palestinian entity. If such an entity does not emerge, an agreement to create a Palestinian state would remain meaningless.

In case negotiations fail to lead to an agreement on a two-state solution, reviving the economy in Gaza and ending the siege will make it easier for an alternative to emerge. The policy of the siege imposed on Gaza cannot have any positive outcome. On the contrary, it will lead to increasing ignorance and backwardness and to the emergence of a young generation unable to envision a positive future and thus more likely to embrace violence than peace. Furthermore, the United States must clearly declare its support for Palestinian reconciliation, even though none of the parties seems interested in reconciliation at the moment.

The two-state solution to which the United States is committed requires unity among Palestinians and development in all Palestinian territories. This is a reality the United States must not forget.