On Tuesday, Israel and Hamas announced a two-phase prisoner exchange that would secure the release of Sgt. Gilad Shalit, an Israeli soldier kidnapped in 2006 and held for more than five years in Gaza. In return, Israel would release 1,027 prisoners, including 280 who are serving life sentences for their involvement in terrorist acts. The deal was initially mediated by Gerhard Conrad, a senior German official with expertise in the Middle East who has overseen prisoner swaps between Israel and Hizballah since the 1990s. But it was Egyptian intelligence chief Maj. Gen. Murad Muwafi who played the pivotal role in recent weeks.
According to reports of the deal, Israel will first release the most controversial 450 prisoners, in exchange for which Hamas will hand over Shalit to Egypt. Israel will then choose an additional 550 or so ostensibly non-Hamas prisoners for release. The group's leader -- Khaled Mashal, based in Damascus -- has reported that the first release will occur within a week and the second within two months. After on-and-off negotiations since Shalit's capture, new circumstances have apparently made a deal possible.

The Calculations of Hamas

Recently, Hamas has watched Palestinian Authority president Mahmoud Abbas, the leader of its rival, Fatah, enjoy an enormous domestic boost as a result of his UN statehood bid. The group's popularity was already low because of its failure to deliver a better quality of life for the people of Gaza. When Palestinians flooded into the streets of Ramallah to cheer Abbas's UN appearance, Hamas suddenly seemed politically irrelevant.

Seeking to reestablish itself, the group finally agreed to compromise with Israel, relenting on demands made during 2009 negotiations with the Olmert government regarding the release of two arch-terrorists: Abdullah Barghouti, a bombmaker responsible for the deaths of scores of Israelis, and Ahmed Sadat, associated with the 2001 assassination of Israeli cabinet minister Rehavam Zeevi. Hamas also agreed that 164 of the released prisoners would be exiled from the West Bank to Gaza. Forty others will not be allowed to live in either Gaza or the West Bank and will instead be exiled abroad -- a measure that Hamas initially rejected in its entirety. The deal is certain to boost the group's popularity despite such compromises. After all, Hamas secured the release of more than 1,000 prisoners in exchange for a single Israeli. Second, the names and crimes of those being freed are significant. Although Israel has often agreed to release prisoners in the past as a gesture to Abbas, it has not freed such "big fish." Third, many of those being let out are Hamas officials. Their release not only replenishes the group's ranks, but also sends a strong message that Hamas will not abandon its rank and file. Mashal has stated that these officials "will return to...the national struggle." Fourth, in securing the release of six Israeli Arabs, Hamas has succeeded in pushing Israel across a line that it has refused to cross in the past, in terms of conducting negotiations that involve Israeli citizens.

In addition, Hamas is likely to view the Egyptian mediation as an achievement in itself. The group seeks to improve ties with the "new" Egypt and its military, which previously partnered with Israel in enforcing a blockade on Gaza. This desire is rooted not only in the group's expectations that the affiliated Cairo-based Muslim Brotherhood will be a growing force in Egyptian politics, but also in the changing regional landscape. Hamas is now distancing itself from Syria's onslaught against its own people, including fellow Sunni Muslims. There have been reports that this shift has led Iran to curb its funding of the group, forcing Hamas to seek political and financial backing elsewhere.

Israel's Calculations

Israeli prime minister Binyamin Netanyahu's acquiescence to the prisoner exchange is surprising, as he railed against a similar proposal during Ehud Olmert's final days in office. Indeed, in a televised national speech on July 1, 2010, Netanyahu argued that it would be irresponsible for Israel to swap large numbers of prisoners for Shalit, as many of those whom Israel released in the 1980s have since returned to terrorism. Following this week's announcement, Netanyahu's own brother-in-law, a settler on the West Bank, criticized him on Israeli television yesterday, charging that the Shalit deal contradicts the prime minister's past statements against compromising with terrorists.

The international community may question whether Israel is wise to put such a premium on one life when the exchange may endanger many other lives. Yet the Israeli ethos that has evolved over the years holds that the state should be willing to make sacrifices for any individuals whom it expects to make sacrifices for the state. Furthermore, because of Israel's policy of universal conscription and the sense that a captured soldier could be anyone's son, public pressure on the issue has been overwhelming.

In his remarks at the start of a late-night cabinet session on October 11, Netanyahu stated that the deal was struck because a "window of opportunity" was closing. This was an apparent reference to forthcoming Egyptian parliamentary elections, which may give the Muslim Brotherhood unprecedented power and potentially hamstring future mediation by Cairo. Israeli officials have also claimed to be haunted by the memory of unsuccessful negotiations for Ron Arad, an airman captured in 1986 and now believed dead.

Other factors seem to have played a role in Netanyahu's thinking as well. First, given recent bilateral tensions stemming from shootings in the Sinai and the Egyptian mob assault on the Israeli embassy, the deal helps both countries. For Cairo, mediation demonstrates to the world that it remains a key regional actor willing to work with Israel, while showing the Egyptian people that, unlike Hosni Mubarak, it is willing to mollify Hamas.

In the wake of the Palestinian Authority's UN statehood bid, Netanyahu's decision may be interpreted as a warning to Abbas that Israel is also capable of unilateral action, though it risks validating Palestinian conspiracy theories that Israel favors Hamas as a counterweight to the PA. This could lead some to press Abbas into resuming unity talks with Hamas. At the same time, the fact that Hamas has successfully concluded negotiations with Israel will now make it more difficult for Abbas to claim that he cannot.

Domestic political calculations also loomed large. This summer, Netanyahu was targeted by a massive social protest movement, which argued, among other issues, that the country is paralyzed by political gridlock. Moreover, Israelis see no sign of diplomatic progress with the Palestinians, and indications of regional isolation amid the recent Arab upheavals are increasing. As Israel's Channel 10 reported last week, Netanyahu's approval rating had fallen to 36 percent. But, although the Shalit deal will likely give him a boost in the polls, it will dissipate if the massive prisoner release leads to renewed terrorist attacks.

Conclusion

If the deal is successfully concluded, Netanyahu may believe that the prize is worth the price. But if there is an increase in terrorist violence attributable to Hamas, the deal will backfire.