The utter confusion did not last long. For a few days, the key players in the Middle East conflict were simply too stunned by last week's events to react. They could see that the landscape had changed completely - that the Palestinian national movement had split in two, with Hamas seizing Gaza, leaving Fatah in charge of the West Bank, thereby stumbling into a "two-statelet solution" no one ever planned. But what this meant for the historic conflict between Israelis and Palestinians, no one was sure.
Now they've had time to regroup, the United States, Europe and Israel think they've worked out a response. Not only that, they reckon they have seen a flicker of light in the gloom. Part of the perversity of their trade is to see opportunity where lesser mortals might see only crisis, and so it is now.
The western strategy, endorsed not only in Jerusalem and Washington but by European foreign ministers at their meeting in Luxembourg on Monday, is to set up an elaborate demonstration exercise for the Palestinians. They will be offered two alternative Palestines and asked to choose which one best represents their future.
On the West Bank shall arise Fatahland, soon to be showered with cash from the very western tap that stayed shut as long as Hamas were in the picture. President Mahmoud Abbas will not only receive money but multiple goodwill gestures from Israel: an easing of roadblocks, cooperation on security, a glimpse of the "political horizon", meaning the prospect of negotiations aimed at an eventual Palestinian state. If things go well, a high-ranking Israeli government official told me yesterday, Israel could once again return chunks of West Bank territory to Palestinian control, as it did during the Oslo process.
In Gaza, meanwhile, would fester the new land of Hamastan, an Islamist-ruled hellhole shunned by the rest of the world, starved of all but the most emergency humanitarian aid. Where Fatahland would feel the warmth of the west's open arms and deep pockets, Hamastan would know only its cold shoulder. Pretty soon Palestinians would draw the obvious conclusion. As that Israeli government insider puts it, "They'll understand that moderate policies bring home the bacon, while the other road brings only pain."
You can see the appeal. If all went to plan, either Gazans would eventually rise up and eject Hamas from power, or Hamas itself would realise it had to change course. After all, if the Palestinians of the West Bank were marching towards prosperity and statehood, Gazans would not want to be left behind. The upheaval of last week could surely bring another happy benefit. For years Israel and the US have urged the Palestinian Authority to uproot the "infrastructure of terror" and crack down on Hamas - without much success. Now though, runs the thinking, Fatah are amply motivated to do the job. After they watched Hamas militants execute Fatah fighters in the street, loot Yasser Arafat's home and hurl Abbas's personal cook from the 18th floor of a building to his death, Fatah are only too eager to flush out Hamas from the West Bank.
It sounds logical enough. Nurture a flowering Fatahland while pariah Hamastan withers away. But it is surely a delusion. The first and most obvious danger is that the more generous the west is to Abbas, the more his credibility will be destroyed. Every dollar or euro he takes will confirm him as the lackey of foreign powers, casting him alongside Hamid Karzai of Afghanistan, Nuri al-Maliki of Iraq and Fuad Siniora of Lebanon as a mere western proxy. Each bouquet from Israel will tarnish him further, establishing him as the servant of the enemy. Already the Arab press is comparing Abbas with Antoine Lahad, the strongman whose hated South Lebanon Army served as Israel's policeman. As has happened so often before, in seeking to boost "moderates," the west only hugs them to death.
Besides, the whole idea rests on a series of faulty assumptions. First, it assumes that Israel will indeed come through with the goodies it promises. On this, the record is not encouraging. Ehud Olmert has repeatedly met Abbas and promised the release of tax funds or greater freedom of movement, only to do nothing. Second, even if Israel does hand over the cash, there is no guarantee that Abbas's Fatah-dominated administration could translate that into improvements on the ground. Again, past experience is not encouraging. Put crudely, Fatah has shown itself to be either corrupt or incompetent or both.
But let's be optimistic and imagine the new approach did indeed bear fruit on the West Bank. Do we imagine that Hamas would calmly sit by, watching itself being pushed out of the Palestinian future? Veteran Palestinian analyst and negotiator Ahmad Khalidi asks, "What incentive is there for Hamas to play along and not spoil it?" We all know how easy it would be to wreck any rapprochement between Fatahland and Israel: a simple terror attack on Israeli civilians and it would all be over. Hamas could be clever about it and ensure the attack came not from Gaza but from the West Bank, say in the Hamas stronghold of Nablus. That would undermine Abbas instantly.
The dangers are multiple. If the West Bank is lavished with money but much of it stays in Fatah's gilded circle, thereby creating a class of haves and have-nots, there would be a surge of precisely the resentment that led to Hamas's election victory in January 2006. Who knows, Hamas could even end up taking over the West Bank too - after all, they had the edge over Fatah in elections there. Precedent makes clear that shunning the movement only makes it stronger. Ostracised for the last 18 months, they are more powerful than ever.
Yet this is the current strategy, not just of the Israelis and the Bush administration - who both reiterated it at yesterday's White House summit - but everyone involved. I know it's always more comfortable to cast those two actors as the prime villains in this drama. On last week's Any Questions, the panellists confidently condemned the 18 month-long American and Israeli embargo of Hamas. But that embargo originated in a set of UN demands that Hamas refused to meet, was backed by the EU and firmly endorsed by Britain. This, in other words, is our policy too.
But it is badly mistaken. The sounder approach is surely to recognise that Hamas is now a fact of life in Palestine, just as political Islam is a fact of life in the Middle East. We may wish it were not so - I certainly do - but we cannot wish it away. Hamas enjoys a democratic mandate; it now rules a territory that threatens to be a Taliban-style state on Israel's doorstep. It simply makes no sense to pretend that it does not exist.
The choice now, says Tel Aviv University analyst Gary Sussman, is either "to isolate Hamas, pushing it further into the Iranian orbit, or to engage it, luring it into the western and Sunni orbit". This has to be the more pragmatic course. The story of the last few decades has been a constant effort to wish the Palestinians were represented by people other than those who actually led them. Each of those attempts has ended in failure. It's time to recognise reality and to follow the oldest advice in the diplomats' handbook: you don't make peace with your friends - you make peace with your enemies.
Jonathan Freedland