When Israeli Prime Minister Benjamin Netanyahu sits down with U.S. President Barack Obama tomorrow, the economic plight of the Palestinian citizens of Gaza will be near the top of the agenda. The United States hopes to follow up on Israel's decision to ease its blockade of Gaza, working with the Israeli leadership on further steps that could be taken to allow more goods into the area. Netanyahu, for his part, will no doubt remind the president of the security threat posed by the militant group Hamas, and Israel's need to restrict the flow of any goods that could be used for military purposes.

Although the situation in Gaza is dire, we should not view this dispute solely or even primarily through the prism of economics. The flawed policies of the United States, Israel, and the international community toward Gaza -- and indeed toward the entire Israeli-Palestinian issue -- go far beyond the failure to allow cement and other construction materials into the strip. Without reconciliation between Palestinian factions and the political reunification of the West Bank and Gaza, not only a better future for Gaza but the two-state solution itself will remain out of reach.
Gaza's economic plight is a symptom of a larger failure of U.S. policy. The U.S. approach toward the Israeli-Palestinian issue -- which sets the tone for policies by Europe and other interested parties -- is based in part on two assumptions that are almost certainly false.
First, the United States assumes that indirect talks between Netanyahu and Palestinian Authority President Mahmoud Abbas can lead to direct negotiations, which can then lead to a comprehensive peace agreement that would allow Abbas to outmaneuver Hamas and regain control of Gaza. Secondly, U.S. policymakers believe that a process of internationally funded reform, led by Palestinian Prime Minister Salam Fayyad, can create the strong, efficient institutions needed for a future Palestinian state.
The problem with both of these assumptions is that Palestinian leaders such as Abbas and Fayyad are deplorably weak, due to the deep political, social, and territorial rift between Hamas-controlled Gaza and the Fatah-controlled West Bank enclaves. Without a unified Palestinian community behind him or even a valid electoral mandate, Abbas cannot take risks in negotiations with Israel, one of the many factors -- which also include the lack of will within the Israeli government -- making progress extremely unlikely. And Fayyad's hands are tied in building durable, democratic institutions for many reasons, among them the fact that the Palestinian Authority's legislative branch has been unable to meet in three years, preventing it from making laws and developing political consensus.
Although there is plenty of blame to go around, Washington must evaluate where its policies have gone wrong and stop making the same painful mistakes.
The U.S. inclination to delay, ignore, or manipulate internal Palestinian politics in the service of short-term goals related to Israeli-Palestinian negotiations has been a fundamental error in Washington's policies in the region. In the 1990s, Bill Clinton's administration ignored the authoritarian tendencies of then-President Yasir Arafat, allowing him to undermine the elected legislature and develop a corrupt, ineffective Palestinian Authority, which eventually lost popular support. Then, after the Second Intifada broke out in 2000, George W. Bush's administration tried to manipulate internal Palestinian politics to deprive Arafat of power -- only to have Hamas emerge victorious in the 2006 Palestinian legislative elections and gain the premiership that had been "empowered" at U.S. behest.
Obama has continued Bush's efforts to isolate Hamas and Gaza while also pumping economic and security assistance into the West Bank. But the desired results of such policies are as elusive now as they were in 2006. Hamas is proving to be more capable than expected in controlling and governing Gaza, while the Palestinian leadership in Ramallah becomes increasingly politically isolated and dependent on U.S. and European support.
Is there a way out? First, the United States must stop sacrificing other priorities, such as the need for Palestinian reconciliation and institution-building, to achieve short-term victories in the peace process. Second, though the United States need not engage Hamas directly at the moment, it should signal its support for efforts -- including elections -- to broker a power-sharing arrangement that would reunite the West Bank and Gaza.
Washington should stop impeding reconciliation and providing an excuse to Fatah and Hamas to avoid the necessary compromises. Although there are definitely obstacles the United States would need to overcome in order to support Palestinian reconciliation -- including Israeli objections and U.S. legislation establishing stringent regulations for any assistance to a Palestinian Authority in which Hamas takes part -- efforts to address these problems are more worthwhile and necessary than pursuing the mirage that a negotiated solution is at hand and will resolve internal Palestinian problems.
The United States should signal its openness to a Palestinian modus vivendi even if it does not meet all principles laid out by the Middle East "Quartet," composed of the United States, the United Nations, the European Union, and Russia in 2006, as long as whatever Palestinian government that emerged would allow the PLO to negotiate directly with Israel and would continue security cooperation aimed at preventing violence.
The way out of the Gaza crisis requires more than easing the blockade and offering a few economic blandishments. In the aftermath of Israel's deadly raid on a Gaza-bound flotilla, Obama referred to the situation in Gaza as "unsustainable." When he meets with Netanyahu, he should acknowledge at least in private that U.S. policy toward the Israeli-Palestinian dispute, which is sinking under the weight of facts proving its ineffectiveness, is as well.