By resigning in advance of this dialogue, Fayyad has put himself in a win-win position: if the dialogue succeeds he will be among those who contributed by paving the way for the new government; if the talks fail, then President Mahmoud Abbas will have to come back to him to form a new government. This will enable him to improve his terms, especially as far concerns the ongoing pressure from Fateh, resulting from the movement being left out of Fayyad's current government.

At the same time, however, Fayyad's resignation reveals the depth of the Palestinian political crisis, and the Cairo reconciliation dialogue illustrates how difficult this crisis will be to resolve.

The detailed and frank discussions of the four working committees in Cairo, which include representatives of all factions, have until now succeeded mainly in enabling the parties and the Egyptians to identify areas of agreement and disagreement.

The parties have disagreed strongly on the nature of a new unity government and its political program. While Fateh wants a non-factional cabinet and prime minister, Hamas insists on repeating, more or less, the experience of the 2007 national unity government. This government included representatives of the different factions including Fateh and Hamas, in addition to independent personalities. But that government failed to comply with international requirements or even be consistent with international legality or the Arab initiative.

The discussions in Cairo, which are the first direct exchanges of views on disputed issues between the factions since the Hamas takeover of Gaza, show that it will be difficult for Palestinian factions to reconcile without changes in the surrounding political environment. There are five underlying obstacles.

One is the fact that Hamas has been running two other negotiation processes at the same time: one on an exchange of prisoners and another on a ceasefire, both with Israel. Hamas appears to want to finish these processes before there is intra-Palestinian agreement. The Islamist movement believes that declaring and implementing a deal for a prisoner exchange and a ceasefire that includes the opening of crossings into Gaza will further improve its bargaining position vis-a-vis other factions. That's why the talks have witnessed certain delaying tactics.

Another obstacle results from the very large difference in the realities in the West Bank and Gaza Strip. The fact that the West Bank is essentially under Israeli security control reduces any incentive for Hamas to strike a deal that will allow Fateh to share security control in Gaza, since there will be no quid pro quo in the West Bank. Moreover, Hamas has little interest in weakening its control over Gaza for as long as it still has no ceasefire agreement with Israel.

The third underlying obstacle is the continued failure of the peace process and the victory of the right wing in Israeli elections. This will further reinforce the radical argument in Palestinian society and weaken the argument of moderates who will have nothing to promise their publics from any future political process. Thus Hamas believes that time is in its favor.

A fourth obstacle emanates from the regional environment. Although Arab-Arab reconciliation has reflected positively on domestic Palestinian politics, especially the change in political attitudes in Damascus and Doha, Iran is still a source of financial and political support for Hamas. And nothing has yet changed with regards to this Iranian role. It will take serious progress in the American-Iranian struggle for hegemony in the region before we can expect any positive role from Iran on internal Palestinian reconciliation.

Finally, the geographic separation, exacerbated by Israeli closures and intransigence, between Gaza and the West Bank is also a major obstacle to unity since the separation allows the two areas more easily to develop independently of each other. This no doubts suits Israel's short-term interests, but poses a significant obstacle in the way of cultivating mutual interests between the two areas of occupied Palestinian territory.

These five underlying obstacles will continue to hinder potential reconciliation. They allow for very little hope that the Cairo process will succeed. This will most probably cause Abbas to ask Fayyad to form another government that will control only the West Bank. Such a scenario will further deepen divisions in Palestinian politics and may cause tensions between the two rival factions to further rise, bringing with them the threat of renewed confrontations.- Published 16/3/2009 © bitterlemons.org

Ghassan Khatib is coeditor of the bitterlemons family of internet publications. He is vice-president for community outreach at Birzeit University and a former Palestinian Authority minister of planning. He holds a PhD in Middle East politics from the University of Durham.

AN ISRAELI VIEW A microcosm of recent dynamics

by Yossi Alpher

Salam Fayyad resigned as prime minister of the West Bank-based Palestinian Authority on March 7. His resignation was part of a picture far larger than mere politics in Ramallah. A few days earlier, a donor conference at Sharm al-Sheikh had pledged over $4 billion in aid for the Palestinians. Three days later, Palestinian unity government talks resumed in Cairo, where they continue to this day. All the while, indirect Israel-Hamas prisoner exchange negotiations also continue in Cairo, even as talks aimed at forming a new Israeli government led by Binyamin Netanyahu proceed in Tel Aviv.

Whatever Fayyad's specific intention, his resignation appears to have been both influenced by these developments and a factor that may influence them. Indeed, his resignation seemingly reflects a microcosm of recent dynamics in the greater Arab-Israel sphere.

Beginning at the international level, US Secretary of State Hillary Clinton has effectively signaled that America's $900 million in donations to the Palestinians must be administered by Fayyad. Yet the latter presumably feels that, even in the Obama era, it is not helpful for an Arab leader to be perceived throughout the region as "America's man".

In contrast, most of the wealthy Arab donors from the Gulf are prepared to bypass Fayyad and use some alternative "neutral" mechanism to transfer reconstruction funds to Gaza. This approach was also damaging to Fayyad's standing.

Then too Egypt, seeking to galvanize a new spirit of Arab unity, appears to insist on the emergence of a new Palestinian unity government no matter what the consequences: just paper over your differences and get on with it so you can appear as a unified people at the upcoming annual Arab summit in Doha--and so that the Palestine issue can again be essentially Israel's problem and not Egypt's. Against this backdrop, too, Fayyad was right to step aside, at least until the current unity exercise is over.

Moving yet closer to home, Fayyad needs no great powers of perception to understand that he is liked by neither Fateh nor Hamas and that his sole Palestinian cheerleader, PA President Mahmoud Abbas (Abu Mazen), sent his negotiators to Cairo from a position of considerable weakness vis-a-vis both his own Fateh party and post-war Hamas. Fayyad's successful efforts at governance have alienated and weakened the Fateh old guard and Fateh-oriented militias. The Dayton-trained PA security forces he has cultivated have suppressed Hamas in the West Bank. Yet Fayyad has virtually no political base of his own to fall back on.

Finally, Fayyad contemplates the prospect of a new Israeli government led by Likud's Binyamin Netanyahu. Israel's next prime minister intends to advance only the economic and security spheres with the Palestinians at the expense of a political peace track. Ostensibly, this suits Fayyad perfectly insofar as the economy and security are his strong points--the areas where he has registered rare progress in recent years. In practice, however, such a partnership would turn him into "Netanyahu's man" and doom him politically and possibly physically as well.

Moreover if, as many observers anticipate, an Israel-Hamas prisoner exchange is agreed in the days ahead, the release by Israel of Fateh "young guard" leader Marwan Barghouti is in any case liable to render Fayyad again a marginal figure in West Bank politics.

At the time of writing, it was not clear whether a prisoner exchange would happen, or for that matter how the Cairo unity government talks would develop. If there remains any chance at all that Fayyad will be asked to remain as head of a new unity government backed by both Fateh and Hamas, his resignation ten days ago was probably the right move. If the talks fail, he might remain in office anyway.

It is undoubtedly both a compliment and a huge burden to be seen in so many quarters as the only rational, capable and uncorrupt actor on the scene. It is also unfair, insofar as there are undoubtedly plenty of talented Palestinians fully capable of running the show in Ramallah and Gaza--if only circumstances were different.

But they are not different. The current Palestinian dilemma and Fayyad's unique position offer yet another manifestation of the Palestinian failure since 1994 at state-building. A new unity government is liable to make matters worse, not better, insofar as Hamas will exploit it and the coming Palestinian elections to aggrandize its power. If this happens, Fayyad will be dearly missed.- Published 16/3/2009 © bitterlemons.org

Yossi Alpher is coeditor of the bitterlemons.org family of internet publications. He is former director of the Jaffee Center for Strategic Studies at Tel Aviv University.

A PALESTINIAN VIEW Too good to last

by Daoud Kuttab

It was quite astonishing to hear world leaders so gushing in their praise for Prime Minister Salam Fayyad. The western-trained former World Bank official was variously described as "professional", "transparent" and "effective". US Secretary of State Hillary Clinton managed to combine all these comments in her concluding press conference at the Sharm al-Sheikh donors' conference, which raised more money than anticipated. "The presentation from Prime Minister Fayyad was as good as I've seen from anybody. I mean, that's a presentation that should make every person proud, because it was so professional, so well thought out and it inspired confidence."

Comments in closed meetings elicited similar praise for a man who has been running a caretaker government since President Mahmoud Abbas fired Ismail Haniyeh's Reform and Change-led unity government after militants aligned with the Islamic Hamas movement drove Abbas' people out of Gaza in June 2007.

Fayyad, whose Third Way party garnered a mere two seats in parliamentary elections in 2006, was previously better known for his role as the finance minister who cleaned out the Palestinian Authority when Yasser Arafat was president and in respective governments since. He introduced the concept of making the Palestinian budget publicly and easily accessible and paid salaries to security officials and civil servants by direct deposit, against the wishes of military leaders who wanted control over paying their cadres themselves.

But Fayyad's success went further than such donor-praised transparent financing. He is credited with bringing a measure of security and rule of law to the West Bank. Working closely with US security envoy General Keith Dayton, Fayyad oversaw the training and rehabilitation of the Palestinian security forces that led to Palestinian police regaining control over Jenin and much of Nablus, Ramallah, Bethlehem and recently Hebron. Reform of the judicial system has also been undertaken, giving Palestinians in the West Bank a partially stable legal environment of sorts.

Fayyad has also been credited with introducing a disciplined and efficient system of government. Ministers are expected to lay out their plans and provide regular evaluations of how they are doing vis-a-vis the goals they have set themselves.

The Fayyad government, however, has not had much political clout, other than that given to it by the decrees signed by President Abbas. The Palestinian Legislative Council never gave it a vote of confidence, and the major political parties, whether PLO factions or Islamists, are completely absent from his technocratic cabinet.

Abbas' Fateh faction is totally absent from the Fayyad administration and Hamas has regularly accused Fayyad of collaborating with General Dayton against their members, with many Islamic charities affiliated to Hamas in the West Bank having been closed down.

During his premiership, more than half the Palestinian budget was spent paying Gaza's civil servants, many of whom were asked to stay at home after having been sidelined by the deposed Haniyeh government. Yet despite these payments, Hamas has not been supportive of Fayyad whom it considers an illegitimate prime minister. Fayyad's status deteriorated even further in the eyes of the Islamists when it was leaked that US and other western officials wanted him to serve as the prime minister of any new national unity government.

Unity talks being held in Cairo have given much more clout not only to the Islamists but to the Fateh leaders who have been sidelined from power and cabinet positions ever since the appointment of the technocratic emergency government.

The resignation of Fayyad came in this context. On the one hand, there is strong public, regional and international support for Palestinians to be united. But on the other hand, there is strange unanimity in opposing Fayyad between Hamas and Fateh (with the exception of Abbas). In this context, Fayyad had little choice but to submit his resignation to the president so as to, in his words, "make way for the new government". To make sure that people took him seriously, Fayyad said that he would stay in his position until no later than the end of March.

The resignation of a caretaker government has little meaning. In this regard, Abbas ignored the end of March deadline and asked Fayyad to stay on until a new government was established. The resignation, however, has caused much speculation among Palestinians. Some believe that it represents exactly what Fayyad stated, i.e., an attempt to remove any potential obstacle to the success of unity talks. Others were more skeptical, saying he handed in the resignation so that Abbas could ask him to stay and thereby enhance his position. Others went even further, saying that the true goal of Fayyad is to become president of the Palestinian Authority.

Whatever the real motivation, few will disagree that Salam Fayyad has run a radically improved kind of government, one in which the public good has taken precedent over other issues. The current reconciliation talks in Cairo are very likely to give precedent to political and partisan consideration for any upcoming government. Nevertheless, many Palestinians are hoping that the professional, public-first spirit, if not the person of Fayyad, will continue to take priority in any future government.- Published 16/3/2009 © bitterlemons.org

Daoud Kuttab, a Palestinian columnist, is the director general of Community Media Network, a media NGO that is registered in Jordan and Palestine.

AN ISRAELI VIEW Why did Fayyad resign?

by Avi Issacharoff

A few days after Salam Fayyad's surprising announcement of his resignation, the Palestinian prime minister convened senior journalists in his office in Ramallah. For three and a half hours he laid out his "credo" regarding the peace process with Israel and explained his decision to resign by the end of March. A single motif stood out in all of Fayyad's remarks: pessimism.

Fayyad's assessment regarding the chances for successful negotiations with Israel was dark. In his view, a government in Israel led by Binyamin Netanyahu cannot be a genuine partner in a peace process, particularly while settlement construction continues. The departing Palestinian prime minister related that he has devoted considerable effort to persuading the European Union countries to compose an official document that firmly rejects continuation of the settlement project. He added that the Palestinian Authority would in the near future concentrate on persuading the international community to stop Jewish construction in the territories in order to salvage the peace process.

But the Palestinian journalists who came to Fayyad's office were far more interested in the prime minister's explanation of his resignation. He argued that he had decided to leave in order to facilitate the establishment of a unity government. In any event, he added, he would end his premiership by March 31. It was clear to his listeners that Fayyad's step did not stem only from purely patriotic motives and that he was not merely prepared to forego his position for the sake of Palestinian unity. Fayyad is smart enough to understand that precisely because he would be the first to pay the price of unity, he is better off avoiding the appearance of thwarting or hindering the Hamas-Fateh negotiations.

For some time now, Fateh has demanded that President Mahmoud Abbas (Abu Mazen) dismiss Fayyad and replace him with a prime minister from the ranks of the organization. Fateh leaders were not particularly happy with Fayyad's success. He restored order to the streets of the West Bank, dealt successfully with the problem posed by hundreds of fighters from Fateh's armed militia, the Aqsa Martyrs Brigades, won recognition worldwide and especially by the American government, and became the "favorite son" particularly of former Secretary of State Condoleezza Rice and her staff. Fayyad was everywhere, visiting the "field" and recruiting billions of dollars in donations for the Palestinian Authority while maintaining high ethical standards and fighting corruption.

Yet it was precisely these accomplishments that led to his downfall: they inculcated in Fateh a sense that Fayyad, who is not a member of that organization, revealed its shortcomings; after all, its leaders had failed to overcome the very same challenges. The heads of the Fateh delegation to the unification talks with Hamas in Cairo, Azzam al-Ahmed and former PM Ahmed Qurei (Abu Ala), were among Fayyad's leading opponents. Many commentators felt they would be happy to hear from Hamas an unequivocal demand to replace the prime minister.

Indeed, Hamas too demanded the head of the independent Fayyad and insisted he not remain in office when a unity government is formed. Mahmoud Zahar, a Hamas leader, stated that "even if the sun descends to the palm of my hand, we don't want Fayyad as prime minister"--a particularly strong declaration in Arabic.

Thus Fayyad, recognizing that both major parties demand his departure, decided to preempt and resign. In so doing, he made clear that he will not be the obstacle to unity. Here it is important to emphasize that, despite Fayyad's achievements, it was not only the political leaders who sought to remove him: he never gained widespread Palestinian public support and was never considered a popular leader by the "street". A survey by the Palestinian Center for Policy and Survey Research carried out in early March showed that Palestinians are not particularly appreciative of the Fayyad government's achievements. Some 35 percent of those surveyed argued the legitimacy of the Hamas government in Gaza compared to just 24 percent who confirmed Fayyad's legitimacy. And only 32 percent were satisfied with the performance of the Fayyad government--confirming a trend of declining support reflected over recent months in Palestinian opinion polls.

Conceivably it was a combination of all these factors--declining public support, the deadlock with Israel and the desire on the part of both Fateh and Hamas to remove him--that led Fayyad to decide to resign. But what will happen if Palestinian unity efforts fail? In that case, Abbas can always say that he had never accepted Fayyad's resignation and ask him to again form a government. In this scenario, the departing prime minister will appear to have been called to duty once again to rescue the PA from oblivion.- Published 16/3/2009 © bitterlemons.org

Avi Issacharoff is Middle East issues correspondent for Haaretz. He is the author (with Amos Harel) of "The Seventh War" (on the second intifada) and "34 Days" (on the Second Lebanon War).