HATEM MOUSSA/APHamas Prime Minister Ismail Haniya and his supporters in Gaza, May 1

When I interviewed Salam Fayyad in Ramallah at the end of February, he was a worried man–and with reason. In June 2007 Mahmoud Abbas, head of the Fatah movement and the elected president of the Palestinian Authority, had installed Fayyad as the PA’s “emergency” prime minister. That was right after the clashes in which US-trained Fatah forces were thrown out of the Gaza Strip by security forces loyal to elected Hamas Prime Minister Ismail Haniya.

Abbas hoped that the marriage of Fayyad’s widely publicized managerial skills with large amounts of US and US-encouraged funding–$1.8 billion delivered in 2007, for the West Bank’s population of just 2.5 million–would enable the Fatah-controlled West Bank to flourish. Palestinian voters in Gaza, squeezed tight by the illegal blockade Israel had imposed following the 2006 election there, would then renounce the preference for Hamas they had displayed in the elections and restore Fatah to power.

But it did not work out. Opinion polls conducted in late January–shortly after the end of Israel’s devastating twenty-two-day assault on Gaza–found Hamas more popular than Fatah. Indeed, Hamas was more popular in the West Bank than it was in war-shattered Gaza. No wonder Fayyad was gloomy. He greeted me by saying, in the economist-speak that is his preferred jargon, “Things are, as always, getting incrementally worse. But now the increments are getting bigger.” Two weeks later he tendered his resignation.

In the interview, Fayyad focused on the Israeli authorities’ failure to let him do his job, in two key respects. First, Israel’s continued building of settlements in the West Bank was limiting the possibility that a viable Palestinian state could be salvaged from the land that remained. And second, frequent Israeli military incursions were hampering the PA’s ability to govern in areas that are supposed to be under Palestinian control. “We have proved we have restored law and order throughout the West Bank, so they have no pretext to send their own forces in,” Fayyad told me. “Every time they do that, it undermines us very seriously.”

Fayyad is far from alone in thinking the clock might be running out for the two-state solution. The prospect of building an independent Palestinian state in all or nearly all of the territories occupied by the Israel Defense Forces (IDF) in June 1967–the goal that most Palestinian secular nationalists have adhered to since 1974–looks very remote absent a major change of behavior by Israel. As this prospect has dimmed, many Palestinians and a small group of stalwarts in the ruins of Israel’s peace movement have returned to an older idea that was once more popular in both cultures: that of a single, binational state stretching from the Jordan River to the Mediterranean Sea.

As secular Palestinians’ hopes for a two-state solution have receded, a surprising degree of support for it has come from an unlikely source: Hamas. Given that Hamas has always formally adhered to the goal of a single Islamic state in the whole of historical (Mandate-era) Palestine, this seems paradoxical. Further, if there’s truth to the widely held argument that Palestinian statehood is necessary to Israel’s long-term continuation as a Jewish state, then it is only Hamas’s continued adherence to the PA project that is keeping alive the prospect of Israel’s survival as a Jewish state.

In 1994, when Yasir Arafat returned to the occupied territories to establish the Palestinian Authority, few Palestinians imagined that the PA would still be around fifteen years later. The PA was only meant to be a temporary fix, pending the implementation of a final peace between Israel and the Palestinian Liberation Organization (PLO). The 1993 Oslo Accord, the historic agreement from which the PA sprang, was opposed not only by Islamists but also by many leading secular nationalists. They argued that by recognizing Israel up front, Arafat had ceded the Palestinians’ claims to 78 percent of their ancestral homeland in return for the uncertain possibility that Israel would allow the PLO to establish a severely curtailed “state” in some portion of the remaining 22 percent. But even those who supported Oslo never dreamed that the PA would last so long. According to the agreement, final-status negotiations were to be finished by 1999. Ten years past the deadline, that still hasn’t happened; meanwhile, the “temporary” PA has acquired a constitution, the “basic law” that mandates holding regular elections for the president and the legislature.

When the PA held its first parliamentary and presidential elections in 1996, Hamas–opposed to Oslo and all that flowed from it–boycotted them. In 1996 many Hamas activists were deeply engaged in vicious tit-for-tat violence with Israel, including the dispatch of suicide bombers to places packed with civilians deep inside Israel proper. That was in line with the militant principles on which the group had been founded in 1987, in the tumultuous early days of the first intifada. The founders were members of the Muslim Brotherhood who had already built strong educational and social-service networks in the occupied territories and used them as a springboard to intervene in nationalist politics. Hamas means “zeal”; it is also an acronym for Harakat al-Muqawama al-Islamiyya, the Islamic Resistance Movement. The concept of “resistance” is at the heart of the group’s self-definition, but Hamas has always practiced many different forms of resistance, including sumoud (grassroots-based civil resistance) and armed struggle.

By 2005, though, Hamas had reconsidered its boycott of PA elections. Arafat died in late 2004; Abbas, his political heir, handily won the presidential election in January 2005. Throughout that year, Abbas spearheaded negotiations with Hamas, Israel and the United States to lay the ground rules under which Hamas could participate in the parliamentary race scheduled for January 2006. At the same time, Abbas and Hamas were cooperating in policing the “unilateral” cease-fire that allowed Israeli Prime Minister Ariel Sharon to evacuate all the Israeli troops and settlers from Gaza without harassment.

Sharon and the Bush administration signed off on the rules for Hamas’s inclusion in the elections. Very few people (except a handful of Hamas leaders) expected the party to win. But a combination of Hamas’s impressive grassroots organizing and the chaos and disunity that had wracked Fatah for twenty years gave Hamas a stunning seventy-four of the chamber’s 132 seats. Israel and the Bush administration responded with the siege of Gaza and began working to quarantine and, if possible, overthrow the Hamas government. That was the main rationale for the security assistance that US Gen. Keith Dayton gave to the Ramallah-based Palestinian security forces.

In June 2007, however, as Fatah strongman Muhammad Dahlan was preparing his US-trained forces to move against Hamas in Gaza, Hamas pre-empted him. Dahlan’s forces scattered in disarray, and the brief experiment in “national unity” fell apart. Ismail Haniya set up a Hamas-dominated government in Gaza, and Abbas appointed Fayyad to form his separate, US-backed administration in Ramallah.

So much has happened in the Palestinian territories since 2006 that few Westerners have paid heed to the momentous nature of Hamas’s decision to participate in the elections that year. For the first time, Hamas was buying in to an important part of the PA project. In late 2005, as Hamas precinct captains were building up and tallying their voter lists, their Damascus-based leader, Khaled Meshal, was talking more frankly than ever before about Hamas’s willingness to consider entering into a decades-long hudna (truce) with Israel, if Israel agreed to withdraw its troops and settlers totally from the lands occupied in 1967. With a few further tweaks, the Hamas concept of a lengthy hudna looked intriguingly like an emerging position of support for a two-state-based final peace.

That position could strengthen prospects for unification between Hamas and Fatah. In February of this year, shortly before the opening of key reconciliation talks the Palestinian parties held in Cairo, I interviewed Hamas parliamentarian Ayman Daraghmeh in Ramallah. Daraghmeh, a somber and well-organized physician in his early 40s, said the two key issues on which reconciliation depended were reform of the PLO and reform of the PA’s security forces. “Forming the new PA government will not be so hard, compared with those,” he said. These talks–like the parallel, Egyptian-mediated negotiations between Hamas and Israel over solidifying the January cease-fire and lifting the siege of Gaza–have continued fitfully and remain inconclusive.

On March 2, in Hebron, I interviewed Daraghmeh’s colleagues Nizar Ramadan and Azzam Salhab, both of whom had recently been released from prison terms in Israel that started before the 2006 election. (They ran for office from their cells and were part of the Hamas team that made a clean sweep in Hebron’s nine-seat constituency.) The two men said they were hopeful about the chances of success in the reconciliation talks. “It will be good to bring the two wings of occupied Palestine together,” Ramadan said, spreading his hands to represent two wings–the geographically separated West Bank and Gaza.

Even though Hamas commands considerable support in the West Bank–fifty-two of the seventy-four Hamas parliamentarians elected in 2006 are based there–its ability to exercise its power has been severely hampered not only by Israel, which holds thousands of Hamas members in detention at any given time and forty-four parliamentarians, but also by the PA. Ramadan told me that the Ramallah-based PA security forces were holding “around 700″ Hamas prisoners–seventy of whom had been arrested since the opening of the reconciliation talks in Cairo. In a predawn raid on March 19, IDF snatch squads punched deep into various portions of the West Bank and arrested or rearrested ten leading Hamas politicos. Daraghmeh, Ramadan and Salhab were among those picked up that night, and they have been incarcerated ever since. (Washington remained shamefully silent on this assault against democracy.)

What struck me about the Hamas parliamentarians was the discipline with which they stuck to a unified message, the seriousness of their demeanor, their thoughtfulness and intelligence–and the fact that, despite the immense grief and suffering they and their supporters have endured since 2006, they all talked as though Hamas’s participation in PA institutions was valuable and likely to continue for some time. The only hint that this might change came when Ramadan said, “Hamas is wise because it doesn’t want to get trapped into allowing Israel to drag out the negotiations for another fifteen years, like the fifteen years they’ve already won from this present PA leadership.”

The Gaza war marked the culmination of a long-term campaign that all Israeli governments have waged since 1996: to constrain the power of the PA as much as possible. The Israeli grip on the occupied territories has prevented the PA from building anything faintly resembling a functioning “national” economy. Poverty levels have soared. Gaza has been transformed into a disaster zone. In the West Bank, Israel maintains and tightly controls a gruesome archipelago of small, nominally Palestinian-controlled land-blobs–cut off from one another by Israeli settlements, Israeli-only roads and more than 600 IDF-controlled checkpoints, gates, earth mounds, fences and ditches. A large proportion of the population of the West Bank has been forced onto a dependency-inducing form of international dole. Harvard’s Sarah Roy speaks of “the engineering of the Palestinians into a nation of perpetual beggars–in the West Bank, as well as Gaza.”

Some Hamas leaders–including, crucially, the Gaza-based foreign minister, Mahmoud Zahhar–have argued that if the Gazan economy could be freed from Israeli control, then a Palestinian administration based there could become the embryo of a much larger Palestinian state. Zahhar, Haniya and their Hamas colleagues in Gaza invested a lot in that project, but Israel joined forces with Egypt to prevent it from happening. And then, as we know, Israel received carte blanche from the Bush administration to launch the military assault on Gaza–ostensibly to halt a barrage of rocket attacks into Israel but in effect to destroy the Hamas government, or at least to bring it to its knees.

Despite all the destruction the IDF wrought in Gaza, Hamas was not broken, and it did not cry uncle. Though the IDF assassinated two second-level Hamas leaders, killed an additional 300 to 400 fighters and destroyed most of the mosque-based offices used by the group’s social-service networks, Hamas did not buckle or back down from its core demand that any cease-fire must include the lifting of the Israeli siege. The “big war” ended in an uneasy standoff on January 18, when both sides instituted unilateral cease-fires. But far from lifting the siege, the Israeli government tightened it further; it has even refused to allow the basic building materials for reconstruction to be shipped in. The United States, Europe and Egyptian President Hosni Mubarak have colluded in maintaining this policy of collective punishment. The Haniya-Zahhar team has thus far been unable to change those stark facts, and the humanitarian situation in Gaza remains dire.

Haniya and Zahhar do not, however, form the national leadership of Hamas, as the PA president does of Fatah. Hamas’s highest decision-making body, the political bureau, is located outside the occupied territories. Hamas therefore has a resilience and strategic depth that Fatah lacks. Hamas’s internal organization is also considerably stronger, more disciplined and robust than that of Fatah–as evidenced during the 2006 election and many times since.

Another paradox of recent Palestinian political life is that the large amount of international (mainly European) funding the Bush administration mobilized to strengthen Fatah’s hand against Hamas has instead left Fatah much weaker relative to Hamas than it would have been. Money that could have been spent underwriting the emergence of a sturdy proto-national economy has instead been poured into the salaries and pensions of Ramallah’s often idle civil servants and the members of its bloated security forces. This has further fueled the corruption and clientelism of Fatah and its allies, hastening their internal decay.

And what have Ramallah’s well-funded security forces been doing in recent years? The always well-informed Mustafa Barghouti gave me the answer. Barghouti is a physician and well-regarded former grassroots organizer who founded the Union of Palestinian Medical Relief Societies. Today he heads the small, largely social-democratic Palestinian National Initiative Party. He was one of two party members elected to Parliament in 2006 and was minister of information in the short-lived unity government of 2007. During a late-February interview in Ramallah, Barghouti gave several recent examples of incursions that the IDF had made into supposedly PA-controlled areas in Ramallah and elsewhere. “Palestinian security forces are under standing orders to hide whenever the Israelis come into the areas where they are patrolling,” he added. “But if they get caught by surprise because the Israelis have not given them advance notice, then the Palestinian forces have orders to put their guns on the ground and turn their backs on whatever it is the Israelis are doing.” He said he thought Abbas and Fayyad could change those standing orders. But so far, they have chosen not to do so.

Given the weakness of both Gaza and Ramallah, the center of gravity of the Palestinians’ national leadership has started to move out of the occupied territories: flowing to key centers among the more than 5 million Palestinians living in exile and to the 1.2 million Palestinian citizens of Israel. This shift has big implications, since these are the two Palestinian constituencies whose needs were most notably ignored when Arafat signed the Oslo Accord. Oslo and the negotiations that flowed from it gave very short shrift to the longstanding Palestinian demand that refugees be allowed to return to the homes and properties their forebears fled in the territory that became Israel in 1948. In addition, Oslo and the entire concept of the two-state solution are based on an ethno-nationalist view of statehood that felt threatening to many Palestinian Israelis. In both groups, there is understandable enthusiasm for a unitary, binational state.

People in Israel’s newly ascendant right have also been touting some alternatives to a two-state outcome. Prime Minister Benjamin Netanyahu has revived his former, never feasible idea of a purely “economic” peace with the Palestinians. He and other Israeli rightists also speak of trying to offload the problems of Gaza and the West Bank onto Egypt and Jordan, under what they dub the “regional” approach.

Since the beginning of his term, President Obama has called for speedy progress toward a two-state solution. But thus far, his administration has done nothing to challenge any of the actions by which Israeli policies make this outcome increasingly impossible. The people of Israel and Palestine are thus perilously poised between very different versions of the future. In the luxurious cafes and shopping malls of Tel Aviv, it is easy to imagine that the present situation can be effortlessly sustained. But for the deeply hurting Palestinians, maintaining the status quo is not an option. Unless Obama moves rapidly to throw power behind his so-far empty rhetoric, Palestinians could soon face another destabilizing crisis.

The potential for implosion is high. Already, a rising chorus of voices among the secular nationalists, looking at the debilitating train wreck that the PA has become, is starting to ask whether it might be better to abandon the PA altogether, hand the costs and responsibilities of running Israel’s occupation of the West Bank and Gaza back for Israel to bear directly, and restart negotiations (or resistance) from scratch. Fatah can no longer bear the weight of the PA project on its own. If Hamas withdraws its support from it, the fragile structure of Palestinian politics will collapse–and will likely bring regional stability down with it.

There are other scenarios for renewed conflict between Israelis and Palestinians, too. Today, Hamas is much stronger among Palestinians, and more popular among Muslims worldwide, than it was nine years ago, when Ariel Sharon’s provocative visit to Jerusalem’s sacred Haram al-Sharif/Temple Mount area sparked the outbreak of the second intifada. If another incident of that sort provokes a new round of fighting, it will be Hamas, much more than Fatah and Mahmoud Abbas, that will determine the Palestinians’ future.

The conditions for another explosion of violence in Jerusalem are frighteningly ripe. Successive Israeli governments since 1967 have built vast, thick rings of settlements around the occupied eastern portion of the city. Those settlements cut its 270,000 Palestinian residents off from their compatriots and close relatives in the rest of the West Bank; and now the twenty-five-foot concrete wall reinforces that excision. In recent years, too, settler activists have accelerated their push to establish residential “outposts” deep within the remaining Palestinian residential areas. To do this they have acquired titles–sometimes real, sometimes forged–to numerous Palestinian properties and summarily evicted their owners. The pro-settler municipality has also used zoning regulations to designate thousands of Palestinian-owned buildings “illegal”; and the fear of summary demolition is deepened by municipal bulldozers that have taken down 109 Palestinian homes since 2008, according to UN estimates. (In Silwan, a strongly Palestinian portion of the city, the municipality recently announced that eighty-eight homes would be demolished to make way for a Jewish-themed history park. Secretary of State Hillary Clinton said that such actions are “unhelpful.”)

Palestinians in Jerusalem are particularly vulnerable. Most are not Israeli citizens; they hold Israeli-issued IDs that allow them to live in the city of their birth, but they live with the constant fear that Israel will withdraw these IDs at any moment. Israeli laws prohibit them from holding public political gatherings. The four men elected from Jerusalem to the Palestinian Parliament in 2006 are all in Israeli prisons.

Quietly, and with help from many Palestinian citizens of Israel (who can travel to Jerusalem quite freely, unlike the Palestinians of Ramallah or Hebron), Jerusalem’s Palestinians do what they can to resist. On a windy day in early March I talked to Um Kamel al-Kurd, a woman in her early 60s who has been living in a tent on a bare lot since November, when she and her husband were thrown out of their longtime home in the Sheikh Jarrah neighborhood. The eviction came at 3:30 am and was carried out by a massive detachment of armed police. Kurd’s husband died shortly thereafter.

“Why do they do this to us?” she asked as we warmed our hands over a brazier. “All we want to do is have the three religions of people here live together in peace, but the settlers come from the four corners of the world and throw us out of our own homes!” Israeli police have demolished Kurd’s tent six times, but each time she has returned. And every day a stream of supporters make their way to stand at her side.