In a Pavlovian response to the reconciliation agreement signed by the rival Palestinian factions, under which Palestinian Authority President Mahmoud Abbas will also serve as temporary prime minister, Prime Minister Benjamin Netanyahu presented Abbas with a simplistic ultimatum - peace with Hamas, or peace with Israel. Instead of welcoming the bolstered status of a leader who signed the Oslo Accords and reined in terror in the West Bank, Netanyahu opted to present the deal as a capitulation by the PA to a terrorist organization, and to that organization's policy of rejecting the existence of the State of Israel and opposing a diplomatic settlement.

In all of his talks with Hamas, Abbas made it clear that internal Palestinian reconciliation would not budge him one inch from his commitment to a two-state solution and an uncompromising war on violence. He reiterated that the Palestine Liberation Organization (rather than the PA ) is the organization that signed all previous agreements with Israel, and that it will continue to conduct negotiations with Israel as well.

The reconciliation agreement, which was achieved in spite of objections from extremist elements within Hamas, underscores the joint obligations of the PA, which represents West Bank residents, and the Hamas government, which rules the Gaza Strip. The deal pulls the rug out from under the claim that there is no value in agreements with a leadership that represents only part of the territories' population.

Netanyahu's ultimatum looks like a pretext for torpedoing talks on a final-status agreement based on the Quartet's outline and U.S. President Barack Obama's speech last May. But these negotiations were on the rocks even before Abbas signed the agreement with the head of Hamas' political bureau, Khaled Meshal, due to Israel's refusal to freeze construction in the settlements and present substantive positions on a permanent border.

The ongoing crisis in the diplomatic process is playing a key role in tilting the political balance in the territories toward the opponents of a compromise. These opponents already laud the Israeli withdrawal from Gaza as a victory for "the resistance," and burying the diplomatic process would open a path for them to take over leadership of both the PA and the PLO in the upcoming competition for the Palestinian electorate's backing.

Netanyahu must end his obsessive search for flaws in the internal Palestinian agreement and focus instead on an initiative for ending the conflict. For he has the ability to do so.