On May 4, Palestinian Authority (PA) president Mahmoud Abbas is slated to sign a reconciliation agreement with Hamas leaders in Cairo, a development first announced last week. The move will mark an end to the period of estrangement between the two factions, which began in summer 2007 when Hamas expelled PA security services and Fatah officials from Gaza. Given their acrimonious past, the extent to which the parties will work together going forward is questionable.
The Agreement

At the core of the agreement is a commitment by an interim government of technocrats, affiliated with neither Fatah nor Hamas, to pave the way for PA elections in May 2012. The government will prepare the PA presidential and legislative elections as well as organize balloting for the Palestinian National Council of the Palestine Liberation Organization (PLO), while dealing with reconciliation issues and the reconstruction of Gaza. The parties have also committed to creating a joint Higher Security Committee, decreed by Abbas and composed of Palestinian security professionals.

Although PA officials have indicated that security cooperation with Israel will continue, it is difficult to imagine how the Palestinian power-sharing arrangement will not hinder that partnership -- Hamas has long called for Israel's destruction, and most of the Israeli-PA security efforts have been based on preventing Hamas terrorists from gaining a foothold in the West Bank. This is perhaps the biggest test of Abbas's credibility; while he is assuring Washington, the EU, and Israel that little will change given his commitment to coexistence, questions abound.

Road to Reconciliation

Both Hamas and the PA seem to have softened their positions in order to make the agreement possible. Hamas changed its stance on two components it refused to accept in the 2009 draft accord put forward by Abbas: holding elections in a relatively short timeframe and subordinating Hamas's Izz al-Din al-Qassam Brigades under a PA Higher Security Authority. Many are doubtful whether the latter change will actually occur given Hamas's past tenacity in preserving its autonomy.

In seeking an accord, Hamas appears driven by both threat and opportunity. The current turmoil in Syria means that the Asad regime's historic patronage of the group is no longer a given. Even Sheikh Yusuf al-Qaradawi, a religious patron of Hamas living in Qatar, has publicly blasted Damascus for killing fellow Muslims.

At the same time, Hamas clearly sees opportunity in the shifting regional dynamics. The new leadership in Egypt, which brokered the deal, seems to have created a major incentive: Cairo agreed to open its border with Gaza, making Hamas more confident of an economic boost that would inflate its chances in the next Palestinian election. Currently, the Israeli-Egyptian blockade of Gaza continues to undermine the group's popularity in the polls.

For Abbas, the move toward reconciliation was driven by a mix of factors. First, since the Egyptian revolution, the idea of Palestinian unity has gained increasing allure in the Palestinian polls -- no small matter for Abbas, who likely views both unity and UN support for Palestinian statehood as key elements of his legacy. Each of these elements has loomed larger recently given the increasing unlikelihood of a peace deal with Israel and the multiple announcements of Abbas's intention to retire before the next election. His urgency was clear during a March 16 speech before the Fatah Revolutionary Council, where he pledged his readiness "to go to Gaza tomorrow to end the division and form a government of independent nationalist figures."

While Abbas has emphasized that Hamas made the concessions enabling the negotiations -- a move that caught him by surprise during the April 27 dialogue meeting -- he made a concession of his own by permitting the group to join the PLO, which had previously been off limits. Abbas also remains the head of the PLO (apart from heading the PA and Fatah), the body that he repeatedly notes is designated to negotiate peace with Israel. Yet by allowing Hamas -- which opposes Israel's existence -- to join the group, he is raising fears that the Palestinian side of the peace process is being radicalized.

That Abbas made this key concession suggests there may be more at work than a desire to capture the public mood -- rather, he may have soured toward both the United States and the prospects for peace with the Netanyahu government. In a recent interview with Newsweek, Abbas complained that the State Department did not back Egyptian president Hosni Mubarak, his main regional patron, at the beginning of the Tahrir Square protests. He added that the revolution would produce only chaos and Muslim Brotherhood ascendance, revealing a fear that Washington might abandon him as well. To avoid the latter prospect, Abbas apparently believes that he must stay in step with the new mood in Cairo, a notion articulated by Egyptian foreign minister Nabil al-Araby. That Egypt did not even bother notifying the Obama administration (or Israel) about its efforts to reconcile Abbas and Hamas suggests that new Egyptian policy toward Gaza and Hamas will proceed independent of U.S. involvement.

Statehood Calculations

Abbas also seems to believe that reconciliation will not be a major detriment to the prospects for statehood. In the past, he indicated that progress on that front and Palestinian unity were opposing poles. More recently, however, he has explicitly argued that the Netanyahu government would refuse to meet his terms in any peace negotiations. He seems confident that the UN General Assembly will move the statehood project forward by providing international support this September, despite the absence of negotiations with Israel. As such, he may believe that fostering a united Palestinian people -- arguably more deserving of statehood than a divided people -- is worth the damage that Hamas reconciliation will do to the peace talks, which appeared dead in the water even before the agreement was announced.

This view is only reinforced by Abbas's belief that reaching out to Hamas would carry no penalty with key segments of the international community, which is already disillusioned with Netanyahu's intentions and many countries have expressed willingness to support a Palestinian state regardless of the status of direct talks. Yet it remains to be seen whether the new inclusion of Hamas will deter key European governments from supporting statehood at the UN. (It is interesting to note that UN secretary-general Ban Ki-moon is scheduled to be at the Abbas-Hamas ceremony in Cairo.)

Despite his apparent calculations, reconciliation still entails a great deal of risk for Abbas. Once he enters a power-sharing agreement with Hamas, he will probably lose U.S. aid and impair his credibility -- at least in the United States and Israel -- as a proponent of coexistence with Israel, a reputation he has built over the past four years in particular. Many Palestinians do not see outreach to Hamas as immoral because in their view, the group's hardline stance is comparable to that of Israeli foreign minister Avigdor Lieberman. Yet many call this as an unfair analogy -- even at his most extreme, Lieberman does not call for destruction of the Palestinians, nor does he share Hamas's track record of deliberately killing civilians and glorifying violence.

Implications for Governance and Security

Given the temperamental differences between Abbas and Hamas (e.g., Abbas praised the killing of Usama bin Laden while Hamas condemned it), the reconciliation agreement may not result in a full-on unity government with Hamas members in key cabinet positions. Yet the Fatah-Hamas pact could nevertheless have profound implications for governance, security cooperation, funding, and elections:

In terms of governance, Fatah negotiator Azzam al-Ahmed has stated that PA prime minister Salam Fayad, who is sharply opposed by Hamas, will not remain in that post. This raises several doubts given that Fayad embodies a number of qualities favored by the United States, Israel, and many Palestinians: an anticorruption approach to public finances, a policy of internationally respected institution-building in preparation for statehood, and authority over newly professionalized security services (e.g., he has publicly declared that anyone who attacks Israel is an "outlaw"). If he is in fact forced out, who would fill the void? If Fayad is deposed, it would be a sad ending to a liberal experiment in the West Bank.

Regarding Israeli-PA security cooperation, Abbas seems to believe that he will retain his leverage given the degree to which Israel values the excellent cooperation seen in recent months. Yet it is uncertain how durable such efforts will be going forward. How will a power-sharing agreement coexist with the current Israeli-PA approach of arresting and imprisoning Hamas militants? How can Abbas hunt Hamas terrorists while working with the group's political figures? Moreover, Hamas will likely press Abbas to release many prisoners -- will he yield?

As for budgetary issues, the PA depends on approximately $1 billion in foreign assistance to pay government salaries. Of this amount, $150-200 million comes from the United States (half already disbursed this year), and approximately $300 million comes from tax clearances collected by Israel on behalf of the PA. When news of PA-Hamas reconciliation broke, Israeli finance minister Yuval Steinitz announced a delay in transferring the tax clearances. This has created speculation that the PA will seek funding from Saudi Arabia to compensate for the shortfall.

Palestinians and Arab states have given short shrift to Israel's statements against reconciliation, believing it has no option but to acquiesce. Yet Israel's leverage is twofold: in addition to withholding tax clearances, it can take actions on the ground that could prevent the PA legislature from reconvening and Palestinian elections from being held.
U.S. and Quartet Policy

In light of the reconciliation agreement, senior members of Congress who had been pivotal in ensuring U.S. economic support for the PA over the past few years now oppose further assistance, including Rep. Nita Lowy (D-NY) and Rep. Gary Ackerman (D-NY). Moreover, the new chair of the House Foreign Relations Committee, Rep. Ileana Ros-Lehtinen (R-FL), has made clear that she will seek to eliminate PA funding, stating that the participation of a U.S.-designated terrorist group in the Palestinian government would legally require Congress to do so. The issue extends beyond foreign aid -- it could also affect the U.S. military's effort to train and equip nearly 3,000 members of the Palestinian security forces, a program praised by the PA, the United States, and Israel.

Apart from congressional funding and assistance decisions, the platform of the new PA government and the composition of its ministers will determine whether the Obama administration can even legally meet, let alone negotiate, with Abbas. The administration is also reportedly waiting to see whether the new government will continue effective security cooperation -- until that issue is resolved, the White House is likely to remain on the sideline. This view suggests that the chasm between Abbas and Hamas is so wide that the clauses of the Cairo accord will not be implemented.

In the aftermath of Abbas's reconciliation announcement last week, the United States was the only member of the Quartet (which also includes the EU, Russia, and the UN) to reiterate the body's 2006 eligibility criteria for recognizing Hamas: namely, that the group must declare Israel's right to exist, disavow violence, and adhere to past agreements. In contrast, both UN secretary-general Ban Ki-moon and EU foreign minister Lady Catherine Ashton voiced cautious hope while calling on Hamas to disavow violence, and Moscow openly welcomed the announcement. This suggests that they favor Abbas's move rather than viewing Hamas as beyond the pale.

On the Israeli side, Prime Minister Netanyahu is scheduled to visit Washington in just a few weeks, where he is expected to speak to a joint session of Congress. The PA-Hamas agreement is likely to ease his sense of pressure during the visit. Previously, observers speculated that President Obama might deliver a speech before Netanyahu's congressional address, outlining the U.S. perspective on the Arab Spring and, in that context, laying out U.S. principles for an Israeli-Palestinian final-status agreement. Yet offering generous peace terms at a time when Abbas is reaching out to Hamas would have profoundly negative implications, vindicating the view that U.S. policy can be moved by sharing power with a group that the Obama administration called a "terrorist organization" just last week. It also raises doubts about the gap between presidential exhortations and lack of implementation.

Conclusion

A convergence of interests has brought Abbas and Hamas to announce a unity agreement. While many in the United States and elsewhere wonder if the agreement will collapse from its own weight, Abbas is counting on the notion that he can reconcile such an agreement with the PA's current commitments. But progress toward real peace and independence has always come at the expense of Palestinian unity, not to mention Israeli unity. Abbas is challenging this notion at his own peril.