Talking to Terrorists: How Israel Is Negotiating with Hamas for a Gaza Cease-fire

With Egypt playing the middleman, the process allows for deniability on both sides.

Israeli Prime Minister Ehud Olmert (L) believes Israel is ''very close'' to deciding on what action to take to stop continued rocket attacks from the Hamas-run Gaza Strip.

Israeli Prime Minister Ehud Olmert (L) believes Israel is ''very close'' to deciding on how to stop rocket attacks from the Hamas-run Gaza Strip.

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JERUSALEM—When President Bush told the Israeli Knesset last week that negotiating with "terrorists and radicals" amounted to Munich-style "appeasement," it got Israelis applauding and U.S. presidential candidates talking tough.

The irony, though, was that Bush's hosts were at that moment in the latter stages of indirect negotiations with Hamas, one of the terrorist groups singled out by the president for ostracism. Those talks, mediated by Egypt, have been going on for months and are expected very shortly either to end successfully in a cease-fire between Israel and the Hamas-run Gaza Strip, or to collapse and signal a major escalation in the fighting.

The go-between for Hamas and Israel is Egyptian intelligence chief Omar Suleiman, who is meeting separately with top officials from each side this week in Sharm el-Sheikh in what are considered make-or-break talks.

If a cease-fire is reached, Israel will likely make no announcement; Prime Minister Ehud Olmert admits publicly only to holding talks with Egypt, not Hamas, although no one here seems to be fooled. A cease-fire would give indefinite respite to Gazans and residents of Israeli border towns; ease or lift Israel's blockade of Gaza, allowing people and goods to move in and out; and possibly bring about an exchange of hundreds of jailed Palestinian militants for Israeli Cpl. Gilad Shalit. Shalit's capture by Palestinian guerrillas in June 2006 raised the intensity of warfare several notches and may have influenced Hezbollah's decision the following month to snatch two Israeli soldiers on the Lebanese border, which set off a major war with Israel.

A cease-fire would also be a tremendous political victory for Hamas, thus counting as one more nail in the political coffin of Mahmoud Abbas, the moderate leader of the Palestinian Authority who is much more America's and Israel's man than he is the Palestinians'.

If, however, the cease-fire talks fail, the seven-year-long war across the Israeli-Gazan border is expected to reach new heights—and soon. During Bush's visit last week for Israel's 60th anniversary, a Gazan missile crashed into a shopping mall in Ashkelon, a Mediterranean coastal city of 120,000, leaving an Israeli woman and her baby badly wounded and causing minor injuries and shock to dozens more people.

Said Olmert: "The situation will not go on like this. The crossroads for deciding how to proceed is approaching very rapidly."

Either way the war turns, Olmert may get a temporary breather from the political pressure on him to resign on account of the police investigation being mounted against him—the fifth of his two-year tenure.

But while the public, the media and his political rivals may be temporarily distracted by an upheaval on the Gazan front, police detectives and state prosecutors will not. On Friday, Olmert is scheduled to appear for a second round of questioning by the police fraud squad over allegations that in the years before he became prime minister, when he was mayor of Jerusalem and then vice premier, Olmert received hundreds of thousands of dollars in cash from a Long Island businessman and fund-raiser, Morris Talansky.

The prime minister has not denied receiving numerous envelopes filled with cash, but he insists that none of it ever went into his own pocket. Even if, as he has reportedly said, this affair is not about bribery, only about "campaign financing"—whose laws are broken by Israeli politicians almost at will—all those envelopes stuffed with green leave him with a lot of explaining to do.