The violent coup in Gaza carried out by Hamas, the Palestinian Islamic extremist movement, is a devastating setback for U.S. foreign policy, the prospects for Israeli-Palestinian peace, and efforts to democratize the volatile Middle East. Hamas's consolidation of power in Gaza is a major victory for Iran and a threat to Egypt and Jordan, as well as Israel. When President George W. Bush and Israeli Prime Minister Ehud Olmert meet tomorrow, two major issues on their agenda will be how to contain Hamas and how to restrict the spread of Iranian influence in an increasingly turbulent Middle East. The Bush Administration should reach out to allies in the region, in addition to Israel, also threatened by Iran's rise.

Two Lessons

Now that Hamas has consolidated its stranglehold on Gaza and finished dragging the bodies of "collaborators" through the streets, Palestinians face a grim future. After years of rationalizing terrorism as a legitimate form of "resistance" against Israel, Palestinians in Gaza will now face terrorism on a daily basis as Hamas executes its totalitarian agenda.

Israelis are likely to suffer increasingly deadly terrorist attacks from Gaza. The unilateral withdrawal from Gaza that Prime Minister Olmert's Kadima Party championed has now been exposed as a risky move that rewarded Palestinian hardliners while undermining Israeli security.

The rise of "Hamastan" in Gaza is also a sharp indictment of the Bush Administration's policy of supporting rapid democratization of a society that lacked the necessary civil and political culture to sustain a pluralist democracy. Hamas was first introduced to power in the January 2006 elections that were supported by Washington, in part as a means of undermining Yasser Arafat's corrupt grip on power. Hamas was allowed to compete in the elections despite the fact that it had rejected the 1993 peace agreement with Israel that created the Palestinian Authority and authorized the elections. Moreover, Hamas should have been disqualified due to its violent, anti-democratic ideology and the fact that it remains fanatically determined to destroy Israel.

Gaza's violent convulsions demonstrate the dangers of allowing political parties to compete in elections without first requiring them to disband their militias and disavow ideologies that call for killing and persecuting others. This reinforces the lessons of Lebanon, where Hezbollah ignited a war with Israel last summer after gaining political power through elections that some argued would help to moderate its extremism. Gaza's meltdown also serves as a dire warning for Iraq, which has also permitted radical parties to participate in elections without demobilizing their militias.

Containing Hamas... and Iran

In addition to rejecting unilateral withdrawals and premature democratization, Bush and Olmert must consider practical steps to contain Hamas in Gaza and prevent it from spreading its poisonous ideology to Palestinians in the West Bank, which is still dominated by Fatah. As bad as Fatah is, Hamas is far worse--for American, Israeli, and Palestinian interests. The two leaders must work to build a firewall against the expansion of Hamas's power.

Bush and Olmert are likely to focus on two key issues: how to strengthen pragmatic Palestinian forces against Hamas and how to deal with Iran's growing influence over the Arab-Israeli conflict through its close ties with Hamas, other Palestinian extremist groups, and Lebanon's Hezbollah. On the first issue, it is an open question how effective Palestinian President Mahmoud Abbas can be in the future, given the rapid collapse of his Fatah supporters in Gaza. Although he publicly advocates the negotiation of peace with Israel, it is doubtful that the indecisive Abbas has the power or public support to function as a long-term alternative to Hamas.

Israel is already quietly helping Fatah forces in the struggle against Hamas. Olmert may seek to expand this cooperation. This would be risky, because Fatah can easily revert to its hostile policies toward Israel. Moreover, helping Abbas could backfire and undermine him politically by seeming to vindicate Hamas propaganda about Fatah's collaboration with "Jews and Americans."

Now that the short-lived Palestinian "national unity" government has dissolved, the United States should support efforts to lift the ban on Western aid to the Palestinian Authority on the West Bank, while firmly maintaining the boycott on Hamas-controlled Gaza. Israel should resume transferring tax revenues to the Palestinian Authority in the West Bank and ease restrictions on the entry of West Bank workers into Israel, to the degree that this can be done without jeopardizing Israeli security, while continuing to deny funds and cross-border jobs to Gaza. Over time, Palestinians in Gaza are likely to chafe at the economic misery, chaos, and international isolation that Hamas has imposed on them.

To combat Iran's rising influence in Gaza, Bush and Olmert should make plans to work with Egypt and Jordan, who also are threatened by a Hamastan allied with Iran. And all countries should push for the introduction of an international peacekeeping force to be inserted along Gaza's border with Egypt, or Israel will be forced to intervene to halt the smuggling of arms and people across that frontier.

War on the horizon

Hamas's coup in Gaza is a death blow to the comatose peace negotiations. At this point, the best that can be expected is a precarious cease-fire between the Israelis and the Palestinians. Secretary of State Condoleezza Rice has traveled to the region several times in recent months to speak about a "political horizon." But the recent events in Gaza cast a dark pall over that horizon. As long as Hamas remains in power, a genuine peace is impossible, because Hamas remains implacably committed to the destruction of Israel.

James Phillips is Research Fellow for Middle Eastern Affairs in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.