Hamas is having a good revolution.

The unrest that has transformed the Arab world outside the tiny coastal enclave has boosted the standing of the Islamist group within Gaza and strengthened its position against the rival Palestinian Authority, which holds sway in the West Bank.

Hamas greeted the downfall of Egyptian former President Hosni Mubarak with euphoria, sensing that his departure would weaken Israel's stranglehold on the impoverished territory that has crippled its economy and confined its inhabitants.

Mubarak's exit has also deprived both Israel and PA President Mahmoud Abbas of their closest Arab ally, leaving them suddenly exposed in a rapidly changing region.

"The next Egyptian government will never accept the suffocation of Gaza. There will be an end to the blockade and to the isolation of Hamas," said Hamas spokesman, Fawzi Barhoum.

"It will take time, but the future is looking good."

Hamas, which does not recognise Israel, won elections in the Palestinian Territories in 2006 and seized control of Gaza 18 months later after a brief civil war against Abbas's allies.

Since then it has survived an Israeli military onslaught launched after repeated cross-border rocket attacks and struggled to overcome a grinding blockade that has left 80 percent of the 1.5 million inhabitants dependent on aid.

Mubarak, in collaboration with Israel and in line with U.S. policy, enforced strict limits on the movement of people and goods across the Gaza border, adding to the hardship in the remote, litter-strewn corner of the eastern Mediterranean.

Amongst the forces set to play a major role in the new Egypt is the powerful Muslim Brotherhood, which has extremely close ties to Hamas and favours opening up the frontier.

WEST BANK BLUES

As optimism grows in Gaza, so it fades in the West Bank.

Hopes that Abbas could engineer a lasting peace deal have been snuffed out by Israel's refusal to halt settlement building and the PA's efforts to end the split between the Palestinian entities have been blunted by an increasingly emboldened Hamas.

"Hamas believes that time is not on the side of the Palestinian Authority, and I agree with them," said Ghassan Khatib, director of the government media centre in Ramallah, giving the PA little hope of meeting its promises.

Hamas refused an offer this month to enter a unity government and has turned down Abbas's call for elections, saying the PA must first cease all cooperation with Israel and release hundreds of Hamas supporters held in West Bank prisons.

Some analysts have predicted that both Abbas and Hamas could face the sort of protests that have roiled their authoritarian neighbours, but so far a mixture of firm-handed policing and apparent public apathy have nipped demonstrations in the bud.

"We are fragmented, we are tired, we don't trust anyone, we have the Gaza siege and the Israeli checkpoints," said Raji al-Surani, director of the Palestinian Center for Human Rights in Gaza. "That is why there is no protest movement here."

However, a pro-unity rally has been called for Gaza on March 15 and Hamas is likely to face growing calls to put aside its animosity towards the PA and agree to reconciliation.

"If Hamas doesn't seize this moment, then it will be a problem for Palestinians for many years to come," said Surani.

ANNEXATION OR OCCUPATION

The Palestinian Authority itself is warning Hamas not to pin its hopes on the emergence of an amenable Egyptian government, saying the realpolitik in the region will dent its aspirations.

"The reason Egypt has not totally opened the border even now is not because they have a problem with Hamas but because they understand that to do so would lead to the de-facto annexation of Gaza, which is what Israel wants," government spokesman Khatib said.

Gaza was occupied by Egypt from 1948 to 1967 and senior Israeli officials made clear in private during the Mubarak era that they would like to see Cairo take charge again.

But security officials in Israel say Gazans are more likely to see a return to Israeli occupation rather than any annexation if Cairo opens the border and lets arms flow to Hamas, which is backed by Iran and is stockpiling missiles.

The last time the border came down was in 2008, when Hamas explosives destroyed part of the barrier. The United Nations estimated that half of Gaza's entire population crossed over seeking goods before the alarmed Egyptians restored order.

One of those who crossed was Ayman Nofal, a top Hamas military commander. He was swiftly arrested by Egypt and held without charge for three years before escaping during the recent turmoil and managing to get home through a secret tunnel.

Surrounded in his living room by large bouquets of plastic flowers celebrating his return, Nofal predicted a new era in Gaza-Egypt relations, but saw no let up in tensions with Israel.

"We are preparing for the next round of fighting," he said, adding that he would soon be joining his old brigade.

"We have chosen the path of resistance and it is the best path we could take. Either we will have victory or martyrdom."