A new chapter in the Israeli-Palestinian conflict began late January when the Islamic Resistance Movement, known by the Arabic acronym Hamas, won a majority of seats in the Palestinian parliamentary elections. For more than 30 years, the leadership of the Palestinian people consisted of the al-Fatah movement, led by the late Yasir Arafat. More remarkable about this political turnover is that the party the Palestinian voters freely elected is considered a terrorist organization by Israel, the European Union and the United States.

The result is now a complex political and financial dilemma that must be tackled in order to restart the peace process. Unlike the purely militant terrorist groups, such as Islamic Jihad or the Al-Aqsa Martyrs Brigade, Hamas has a large and active social wing. As the Palestinian Authority’s leadership deteriorated during the ’90s, Hamas made major strides in winning public support through its well-run health and educational institutions. This, and not its chartered goal of the destruction of Israel, is the main reason why Hamas won the elections. A key factor to Hamas’ win was that it did not have the corrupt reputation that plagued the Fatah-led PA, which a recent investigation by Palestine’s attorney general revealed had misused and defrauded close to $700 million from the PA’s public funds. The main concern now is money.

Practically the entire governing infrastructure and thousands of paychecks in the Palestinian territories rely on foreign aid. The EU and the U.S. provide around $600 million and $400 million, respectively. For both, however, it is illegal to give money to a terrorist organization. If this funding ceases, where will Hamas turn to get the funding it needs to keep the Palestinian society functioning? Much of the Arab world, aside from the theocratic Iran, would be wary of funding an Islamic organization that might prove to run a more effective government than their own secular regimes ever did. For the moment, the U.S. and Israel appear open to dealing only with current Palestinian President, Mahmoud Abbas. This is a temporary wait-and-see solution, for Abbas has indicated that Hamas should form the new government, and his role will not be prominent.

One option for the foreign aid to legally flow is for Hamas to come off the watch list of terrorist organizations. To do this, Hamas must cease its militant activities and come to terms with the diplomatic stage in which they find themselves a leading actor. This involves accepting the blunt realities that Israel will not be destroyed and a two-state solution is the most realistic resolution to this conflict. You will hear shouts of protest from the extremists on both sides, but I believe it is largely rhetoric aimed at appeasing their respective bases. In America, for example, conservative lawmakers will drum up support to ban gay marriage, and Democratic leaders like Howard Dean will utter ridiculous pot-shots at Republicans. Neither of these attempts at galvanizing their bases are representative of what the mainstream truly believes. Hamas states that it will not change its policies until Israel withdraws from the occupied territories (an area that varies according to which definition one subscribes) and stops military action against Palestinians. Mahmoud al-Zahar, co-founder of Hamas, has dodged questions about whether Hamas will ever recognize Israel or whether they would ever accept a two-state solution; however, he must know that Palestine cannot afford to lose the support of the U.S. and the EU. Just as the Palestinian Liberation Organization under Arafat had to moderate their stance (Arafat for the first time recognized Israel in the early ’90s after decades of refusing to acknowledge it.), Hamas will be forced to negotiate and make concessions.

When it comes to the option of cutting off the foreign aid, a move that will destabilize a Hamas-led government, Hamas leaders decry it as a betrayal of America’s policy of promoting democracy; however, supporting democracy does not necessarily imply support for a democratically elected government. Recognizing the political reality that Hamas was elected to power and supporting it with diplomatic and monetary aid is not a singular choice. For the U.S. and EU to continue the foreign aid to the PA, Hamas will have to give them something in return, and this will be a critical step for Hamas as it moves from being an opposition movement to a recognized government.

Saket can be reached at [email protected]