In recent decades a number of democratic transitions began when an authoritarian government agreed to elections under rules it had designed to ensure its continued hold on power—and then lost. In the Philippines in 1985, Chile in 1988, Poland in 1989, and Yugoslavia in 2000, rulers ceded power, gracefully or not, after a surprising defeat at the polls. In Palestine in 2006, the long dominant Fatah party lost to a “Change and Reform” slate assembled by the Islamist Hamas movement.

There has been less friction than might have been expected between Fatah and Hamas during the transition, largely because President Mahmud Abbas and the new Hamas majority have been fairly conscientious in observing procedures. New parliamentarians—though inexperienced—have intently studied the constitution, legal framework, and parliamentary bylaws. For instance, when they discovered that the outgoing cabinet had not submitted a 2006 budget and that the Palestinian Authority would lose its legal authority to spend money, they refused to ignore the issue (as the outgoing parliament had often done) but instead quickly rushed through legislation allowing an extension. But there continue to be rough spots. The outgoing Fatah majority in parliament tried to rush through a set of measures (now challenged in the courts) and the incoming Hamas speaker of parliament called in public prosecutors to investigate suspected forgery of parliamentary records. And the critical issue of control of the security services has not been resolved.

Hamas's restraint regarding domestic affairs has helped. Chairmanships of parliamentary committees have been doled out among various parties rather than monopolized by the governing majority. And Hamas's legislative program is at present quite modest. Deputies have mentioned few laws that they wish to see passed; when pressed, they identify only general issues rather than specific projects. Even on religious matters Hamas seems anxious to assure Palestinians that they are in for no sudden change. Nasser Al Shaer, an Islamic law professor who doubles as Education Minister and Deputy Prime Minister, has abandoned former calls for a constitutional prohibition on legislation that violates Islamic law and promises that there will be no major changes in school curricula.

The new government is promising to focus on efficiency, clean government, and ending the disorder in Palestinian streets. Indeed, the Hamas government program says little of struggle and resistance; Islam and Islamic law are passed over in silence. But corruption is denounced three times and rule of law mentioned five times. The newly seated parliament has attracted attention for its insistence on extended prayer breaks, but the deputies themselves speak far more about transparency and economic problems than they do about the sale of alcohol or women's dress.

Much of the modesty of Hamas's objectives reflects its reading of the public mood. While some of its core constituency may wish to see a thorough Islamization of society and a return to what Hamas terms “resistance,” the movement won the election by its promise of reform and honesty. Hamas confronts some legal limitations as well, as the presidency retains certain powers and most of the bureaucracy was hired by Fatah and is protected by a strong civil service law.

While domestic affairs are proceeding quietly, however, the international environment poses a significant set of obstacles. Hamas's efforts to pull other parties into the cabinet ultimately foundered on its unwillingness to give unambiguous pledges to honor past international agreements or accept the authority of the Palestinian Liberation Organization, a largely moribund body that still claims the allegiance of Palestinians throughout the world.

Economic and fiscal limitations are most daunting. The Palestinian economy is dependent on access to Israeli markets and ports; the budget is dependent on taxes on entering goods that are actually collected by Israel as well as on foreign assistance. Hamas's victory has faced Palestinian society with the loss of all of these vital sources of economic growth and government revenues. To date Hamas has yet to deliver on a solution beyond a variety of slogans including tightening belts, eliminating the abuse of public funds, donations from friendly Arab and Muslim states, economic self-reliance, and greater economic integration with surrounding Arab states. When queried on their solution to the dire fiscal crisis, government leaders are easily able to identify actions others should take but indicate no practical solutions of their own.

In addition, it is not clear how long the lull in Israeli-Palestinian violence can survive the stubborn Hamas refusal to soften its position and the Israeli determination to pursue a unilateral solution in the absence of negotiations. Last month's Israeli raid on Jericho and the Hamas pledge not to suppress anti-Israeli violence by other Palestinian factions suggest that Palestinian electoral democracy is threatened less by Hamas's uncertain democratic credentials—indeed the party's rhetoric and positions are probably more democratic than those of any other ruling party in the Arab world—and more by the conflict with Israel, which its electoral victory has greatly deepened.

Nathan J. Brown is a senior associate at the Carnegie Endowment for International Peace.