During the Arafat era, Israelis were ambivalent, even cynical, about the Palestinian reform process. The election of Mahmoud Abbas (Abu Mazen), who appears to be more genuinely committed to reform, will perhaps produce a more positive Israeli attitude. But for a host of reasons, in some circles the skepticism will persist.

Initially, with the advent of the Palestinian Authority in 1994, the Rabin government ignored Palestinian financial corruption—indeed, at times collaborated in stashing away funds on behalf of Arafat—and condoned Arafat's dictatorial tendencies and the proliferation of security organizations. From Israel's standpoint, as long as Arafat delivered on security and the peace process could proceed, it mattered little what sort of regime he maintained. Israel, after all, had never cited lack of reform in Egypt or Jordan as reasons not to make or maintain peace with its Arab neighbors. Indeed, in the Palestinian case Israel did insist upon the establishment of a democratic regime structure as part of the Oslo process, but by and large Israeli interest in that process went no further.

After the peace process collapsed in 2000 and violence broke out, the new government headed by Ariel Sharon began to insist on reform of the Palestinian security services as a means of satisfying Israel's demand for a cessation of violence prior to the resumption of negotiations. With the advent of a radically new U.S. approach after the September 11, 2001 attacks, the Israeli political and security establishment joined in the U.S. call for Palestinian political and financial reform, and generally agreed to assist (subject to security concerns) this new, more comprehensive reform process.

As we enter the Abu Mazen era, the experiences of recent years have created a number of different schools of thought in Israel concerning Palestinian reform. The cynics, mainly but not only on the political right, continue to believe that Palestinians, indeed Arabs in general, are incapable of serious financial, political and security reform. They attribute this to fundamental anti-democratic attributes of Arab culture: attitudes toward women, clan-based societies, Islamist tendencies, etc. Broadly speaking, they expect Abu Mazen to fail, just as they anticipate failure in Iraq.

Prime Minister Sharon himself almost certainly belongs to the cynics. But he will cooperate with reform programs and indeed adopt them as criteria for political progress because he understands that this approach is vital for maintaining close relations with the Bush administration. Yet to the extent that Abu Mazen is perceived to be succeeding at reform and the Palestinian experiment in democracy and transparency is held up as a success, Sharon will be in a predicament. Simply put, he does not want to make the territorial concessions that would be deemed necessary to create a stable two-state solution between Israel and a democratic Palestine. Hence Sharon, who is in general deeply skeptical concerning peace agreements with Israel's neighbors, is likely to play down Abu Mazen's reform successes, and to seek to use additional, but limited, disengagement initiatives to preempt a political process.

A successful Palestinian reform process would present an even greater challenge to the Sharansky/Netanyahu neo-conservative school of Middle East reform, which predicates any and all progress toward peace on Arab democratization and reform. Suppose Abu Mazen succeeds? Will Sharansky, who has long championed the West Bank settlements, now agree that they be removed? Or will he prove what his critics say, that the democratization demand is merely an excuse for holding onto land?

There are also elements of Israeli society that are likely to take a more positive view of Palestinian reform and peace. There are bureaucratic and NGO technocrats who have always been interested in assisting Palestinian reform, as well as a relatively small camp on the left that will advocate an immediate return to comprehensive peace negotiations, regardless of the status of Palestinian reform efforts. Neither of these groups is likely to wield significant political influence for now. The Israeli security establishment, on the other hand, could become an effective advocate of territorial and other compromise if it recognized as a genuine, trustworthy security partner that had succeeded in stamping out Palestinian terrorism.

Which Israeli approach to Palestinian reform prevails depends on many factors. Some are external to Israel—for example Abu Mazen's success or failure, the success or failure of reform in Iraq and its overall ramifications for the Arab world, and the Bush administration's assessment of the Palestinian effort and willingness to back it by placing demands upon Israel. But the more significant factors will be internal to Israel, especially the outcome of Sharon's Gaza disengagement program and the political landscape that emerges in its aftermath.

Yossi Alpher is former director of the Jaffee Center for Strategic Studies, Tel Aviv University, and a former senior adviser to Prime Minister Ehud Barak. He currently co-edits bitterlemons.org and bitterlemons-international.org.