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This week's setback could actually be good news for the Israel-Palestine conflict

Palestinians with special needs celebrate the unity deal
Palestinians with special needs celebrate the unity deal
Mohammed Abed/AFP/Getty Images

Israeli-Palestinian negotiations are over. Israel suspended them after the Palestinian Authority agreed to form a government with Hamas, a terrorist group constitutionally dedicated to Israel's destruction. The last time Israeli and Palestinian governments were this far apart, they were actively fighting a war. It's the end of the peace process as we know it, right?

Wrong. The Palestinian unity agreement shattered a status quo that had no realistic hope of producing a peace agreement. What's more, Palestinians are planning to hold elections in six months. Those elections could bring a unified pro-peace Palestinian government to power, which would create the first real opening for peace in quite some time. It's a slim chance, but a slim chance is better than none.

Optimism about the Israeli-Palestinian conflict is a sucker's game, of course, and I should be clear I'm not predicting anything like a resolution. Rather, it's that the new situation is comparatively less bad than the status quo ex ante.

That's because Palestinian disunity made a deal functionally impossible. First, look at it from Israel's point of view. Any peace deal with Fatah, the Palestinian nationalist party that controls the Palestinian Authority, would have involved maximal Israeli concessions on every major peace issue, from refugees to Jerusalem. If Israel made those compromises, and the status of Hamas-controlled Gaza was still unresolved, it would have traded all of its negotiating chits in for a partial peace. From Netanyahu's point of view, that's a non-starter.

That's equally true from the Palestinian perspective. Palestinian Authority President Mahmoud Abbas had no real authority to negotiate for Gaza, so any peace deal would have left out 38 percent of the Palestinian population. That would have been extremely unpopular, and may actually have led Palestinian voters to reject the deal. Hamas, for its part, would have had no interest in moderating: it could have attacked any deal as sucking up to Israel, and probably would have been on the right side of Palestinian popular opinion.

So Palestinian disunity meant that neither side had an interest in a peace deal. Now, that barrier is shattered. We've gone from a totally hopeless scenario to an unpredictable one. That's progress of a kind.

What's more, real opportunities are starting to emerge out of the chaos. The Times of Israel is reporting that the new Hamas-inclusive government would recognize Israel, renounce violence, and accept past Palestinian agreements with Israel. If true, this would be tectonic: there hasn't been a Palestinian government united under an ostensible peace banner in about a decade. The fact that this is even being floated suggests a real shift in the basic contours of the conflict.

However, the Times of Israel's sourcing is sketchy — a UN official purportedly spoke to Abbas, who purportedly spoke on behalf of his rivals. And it's more than a little hard to believe that Hamas, an Islamist group committed to Israel's destruction on theological grounds, would give up its foundational beliefs so easily.

The Palestinian elections mandated by the deal are a much more likely avenue for progress. If the Hamas-Fatah agreement holds, they'll hold elections in six months. The most recent polls of Palestinians suggest Fatah would beat Hamas in a fair electoral fight. They also show a majority of Palestinians support a two-state solution.

If free, open Palestinian elections produced a unified pro-peace government, that'd be even better than Hamas recognizing Israel now. It'd be a new, fully legitimate Palestinian government with a mandate to negotiate with Israel.

This wouldn't solve the fact that the current Israeli coalition is arguably the most hostile to the two-state solution than any Israeli government in the era of major peace negotiations. But right-wing Israeli governments have surprised observers before; the arch-conservative Menachem Begin made peace with Egypt.

The Israeli government also isn't monolitic. One of its largest members, the centrist party Yesh Atid, has threatened to leave the government over stalled-out peace negotiations. If the government didn't approach peace negotiations with a serious Palestinian partner, er, seriously, Yesh Atid might make good on those threats. That would force new elections. Israeli voters support a two-state solution by a wide margin, and a pro-peace Palestinian government would give the Israeli peace camp the strongest political hand it's had since the late 90s.

There's every chance things don't go down this way. Again, no one's ever gotten rich betting on Israeli-Palestinian peace, and I'm not saying any of these scenarios are particularly likely.

But, for the first time in a while, there's actual movement. In a situation many people are ready to write off as hopeless, I'll take that over nothing.