For Hamas, the accession of the Muslim Brothers in Egypt was a much needed boost for a movement that had been losing friends and financial backers at an accelerating pace since the onset of the conflict in Syria. Hamas hoped that a friendly government in Egypt would help ease the siege on Gaza, facilitating the flow of goods into the strip and revenues into Hamas’ coffers. But while Morsi’s one year in power failed to meet Hamas’ high expectations, his ouster nevertheless is a devastating blow for the movement. 

Hamas’ nominal support for the Syrian opposition against Bashar al-Assad early on in the Syrian uprising meant that the movement lost not only its international headquarters in Damascus, but also much of the crucial political and financial assistance it received from Iran, the regional sponsor of Assad’s regime. Ghazi Hamad, Hamas’ foreign affairs undersecretary in Gaza, officially confirmed recently that aid from both Tehran and Damascus had been cut because of Hamas’ stand with the Syrian opposition. Prior to the falling-out, according to some sources, Tehran provided over 20 million dollars a month to help Hamas pay the salaries of half of its government employees in Gaza, in addition to military and other assistance. 

Given its dire strategic position, Morsi’s ouster was a serious hit for Hamas. The Egyptian generals who overthrew Morsi have since tightened the siege on Gaza. A month after the Egyptian “popular coup,” the border crossing between Egypt and Gaza remained largely closed, and 80 percent of the underground tunnels—the lifeblood of the Gaza Strip that brought in fuel, food, and construction materials from Egypt—were no longer functioning, according to Robert Serry, a UN Middle East peace envoy. The closing of tunnels, which were a main source of revenue for Hamas, has depleted Hamas’ coffers and caused further deterioration of the economic and humanitarian conditions in Gaza. According to Ala al-Rafati, Hamas’ Economic Minister, the tunnels closure had cost Gaza around 230 million dollars in July, raising the already high unemployment rate with the loss of at least 20 thousand jobs. Al-Rafati also stated that 90 percent of early-stage Qatari and Turkish funded projects in Gaza, another source of income for Hamas and for the Gazan population, have come to a halt due to a shortage in construction materials. 

The association between Hamas and the Egyptian Muslim Brothers has muddied the movement’s reputation in post-Morsi Egypt. The Egyptian media and satellite stations have accused Hamas of interference in internal Egyptian politics and of attempts to destabilize Egypt through the movement’s support for Morsi. Some also held Hamas responsible for the deteriorating security situation in the Sinai. These accusations have generated negative attitudes in Egypt toward Palestinians more broadly, leading Mousa Abu Marzook, Hamas’ second highest-ranking official, to state that the polarization and tension between the Palestinian and Egyptian peoples are at unprecedented levels. On Friday, July 26, 2013, Egypt’s state news agency MENA reported that the army has accused Morsi of conspiring with Hamas in a 2011 jailbreak, adding to the already hostile view many Egyptians have of the movement. Islamist groups in Egypt, in their turn, have also blamed Palestinians for security threats in Egypt and Sinai, but have pointed instead to Mohammed Dahlan, the former Fatah security chief in Gaza, as the culprit behind recent attacks.

Hamas has much to worry about domestically too. Over the one year of Morsi’s presidency, Hamas’ popularity in Gaza rose, according to public opinion polls, from 31 percent in June 2012 to 38 percent in June 2013. With deteriorating economic conditions and further political isolation in the post-Morsi period, Hamas’ popularity is likely to plummet. In addition, the political developments in Egypt put the already fragile reconciliation process between Hamas and Fatah—in which Egypt served as the key facilitator—at risk. The internal turmoil in Egypt may mean that its government would be too preoccupied to put much effort into the reconciliation process. And while Hamas, given its current predicament, might want to pursue reconciliation, Fatah, on the other hand, might be less interested. The start of another round of peace talks with Israel and what appears to be Hamas’ growing weakness both reduce the pressure on Fatah to work toward reconciliation. In fact, Fatah may strive to collaborate with both Israel and Egypt to further undermine its Palestinian rival. The escalating combative exchanges between the two movements’ leadership is an indication that the reconciliation process is at risk. Fatah has also accused Hamas of intervening in internal Egyptian affairs by supporting the Egyptian Muslim Brotherhood. Moreover, according to Hani al-Masri, a Palestinian political analyst, some within the Palestinian Authority want to keep the Rafah border crossing between Egypt and Gaza closed to further tighten the stranglehold over Hamas.

To extricate itself from the crisis, Hamas has very limited options; all entail significant perils. The movement could try to reestablish its relations with Iran, a move that would potentially renew the flow of funds but is likely to further tarnish Hamas’ reputation, given Iran’s backing of Assad in Syria. Redoubled efforts to reach an agreement with Fatah, which will establish a provisional technocratic unity government and then call for election in the West Bank and the Gaza Strip, may be in Hamas’ best interest. But the gaps between the two sides, as well as Fatah’s current lack of incentive to move the process forward, make a reconciliation scenario also unlikely. Hazardously, an outbreak of violence—whether between rival factions inside Gaza due to mounting frustrations or between Egypt and Gaza over the continued siege and the situation in the Sinai—seems like a highly possible outcome of the current situation. To prevent this from happening, all actors involved must strive to calm the growing tensions and temper escalating rhetoric. However, none of them at the moment seems bent on this course of action.

Lihi Ben Shitrit is an Assistant Professor at the School of Public and International Affairs, University of Georgia, Athens. Mahmoud Jaraba is a PhD Candidate at the Departments of Political Science and Middle Eastern Studies at the Friedrich-Alexander University of Erlangen-Nuremberg, Germany. He is the author of Hamas: Tentative March toward Peace (Ramallah: Palestinian Center for Policy and Survey Research, 2010).