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As always running late with the news, but never intended to be on time and time always gives you a better view of the forest. Distance, time distance is a great helper to understand things and analyse them.
The first thing is that I always had the impression the war on Gaza January had as one of its aims to strengthen Tzipi Livni in the February elections, to give the impression to the Israeli public that she was capable of military response to the almost daily rocket attacks from Gaza. And the reason it might have counted with the approval of so many people involved in the situation, from Americans to “moderate” Arab countries was basically because unlike the conservatives (Likud), mostly led by Netanyahu, she (Kadima and Labour politicians) were in favour of an exchange of land for peace. Basically the idea in my opinion was that it was a way of getting closer to the two states solution in the hands mostly of moderates in both camps, Kadima and Labour in the Israeli camp and Fatah from the West Bank.
Quite likely if Livni would have won the elections the most likely scenario would have been that regardless of Hamas opinion in Gaza, they would have started the process of the two states solution in the West Bank.
Of course, not having Livni got enough votes the two states solution, as many have said, was off the table. It's quite unlikely that the Palestinians would be getting close to an independent country with the new Israeli government. You just need to listen to the new Foreign Minister, Avigdor Lieberman to know how difficult that might be.
On thing that I surprises me is the way people seems to either be avoiding talking of another issue, or maybe I am one of the few that has this opinion. I know it's a very sensitive issue to anyone that has any interest on it, but I don't think I'm so far away from the truth.
The rocket attacks from Gaza are caused by several things, the blockade of Gaza was almost a siege but with no troops that were going to take over the territory:
Why the Gaza War Between Israel and Hamas Broke Out Now
“And while Israel can kill lots of terrorists and destroy lots of weaponry, there's always more where they came from. The only way Israel can unilaterally impose a long-term cessation of the rocketing is by massively, indefinitely reoccupying Gaza, home to 1.5 million desperate, hostile Palestinians. Israel tried that route for 38 years before pulling its soldiers and settlers out of Gaza in 2005. Few Israelis are ready for a reprise.”
Smoke rises after an Israel air strike in Gaza Strip December 28, 2008. Israel launched air strikes on Gaza for a second successive day on Sunday, piling pressure on Hamas, Photo courtesy of Amir Farshad Ebrahimi via Flickr
It was really a slow death for the Palestinians first and Hamas second. It was also a way by Hamas of avoiding that exact goal I have talked about above: the two state solution but under Fatah control and obviously excluding Hamas. They had to force the situation somehow to avoid Fatah getting even close to that and hence getting a victory in the eyes of many people, including the Palestinian in Gaza, so any new attack was a way of turning Israeli public against that deal and making Kadima and Livni, look weak in their eyes.
Anyone observing the situation realises that the attacks are actually very unsuccessful in their targets, they rarely caused huge damage in the Israeli side, or at least the kind of damage you should expect from either an army or terrorist group. They are not even frequent enough to consider them anything close to war or a war attack. Coming from the Basque Country and having followed both the political situation in both Northern Ireland and the Basque Country and the development of terrorism in both places I would say that they are closer to the kind of attacks by the terrorist group ETA than the kind of attacks the IRA was involved. They are not massive even though the level of casualties maybe higher than in ETA's attacks, but definitely not the kind of success in the level of casualties the IRA caused during most of its activity. Surprisingly, in the issue of weapons they are closer to the IRA than to ETA, and that considering how poor they are Gaza. Weapons and of that kind are not cheap precisely.
In any case, what it looks clear to me is that they are not going to stop those attacks, so long as Fatah is the one most likely to be negotiating with Israel, as they will be the ones having the political victory in the eyes of everyone. So long as they are not in the negotiating table, chances of them changing course is none. I don't believe that if offered to be in the negotiating table with a certain level of control they wouldn't accept if there is an exchange of land and political independence by Israel. In that case they wouldn't have an excuse not to accept, the IRA and Sinn Feinn in that situation accepted an end of violence in exchange for political power (and money, lest we forget), and they seem to be very, very aware of that. And as the Sinn Feinn, and unlike the many political incarnations of ETA, they have the support of the people of Gaza.
Was it a mistake to allow them to participate in elections? No, because the level of corruption within Fatah and consequences that had for the people in Gaza was sooner or later to caused a rift somehow. It was impossible to keep the situation that way. Unfortunately the situation in those territories had developed for so long so badly that it was almost going back to feudalism in the area and people getting protection for war lords against whatever it happened. Of course those war lords want a bigger share of the pie which means corruption and hence where we are.
Considering how things have developed it's going to be impossible to ignore Hamas, even though I have no doubt they are using the people of Gaza as human shields and for their own political purposes and they want to be in the table. As things stand not only they want to be in the negotiating table but they are going to ask for land and independence from Israel and I wouldn't be surprised at all if they actually put their eyes towards the West Bank and try to extend their influence there too.

Masked Palestinian militants from Islamic Jihad place homemade rockets before later firing them into Israel on the outskirts of Gaza City. Photo courtesy of Amir Farshad Ebrahimi via Flickr As things stand Israel has only two alternatives: either keep dealing with the on and off rocket attacks from Gaza and having to deal with the casualties and the effect those casualties have on the public or negotiate with the Palestinians. And continuing dealing with the on and off rocket attacks is not going to guarantee them anything as there is no reason to believe that those attacks cannot get worse in some way or another.
They could of course take a long term approach and realise that neither Gaza nor the West Back are viable, economically talking, and the population growth in there is already too much for both areas. In the long term outside Israel, they are going to be absorbed by Jordan and Egypt, either from the economy point of view, the political or both. They could endure the attacks and casualties, deal with discrimination of Palestinians within Israel, offering them a real alternative within Israel with real rights and protections and deal with the government corruption in the West Bank and within Fatah. But considering the problems of corruption they have themselves and the fact they had not attempted something like that before it seems unlikely if not impossible