ISRAEL: "WE WILL IGNORE HAMAS-LED PALESTINE AND MAKE IT IRRELEVANT"

Analysis by Peter Hirschberg

(IPS) JERUSALEM -- It took acting Israeli Prime Minister Ehud Olmert more than 12 hours to respond.

Maybe, like most Israelis, he was caught off guard by Hamas's stunning victory in the Palestinian parliamentary elections. Maybe, having stepped into the role of acting prime minister just three weeks ago after Ariel Sharon suffered a massive stroke, he did not want to hurry his reaction.

When he did finally respond, it was clearly the reaction of a man caught between the need to balance immediate electoral considerations with broader diplomatic ones.

A government headed by Hamas, said Olmert, could not be a "partner" for peace, and Israel would act to make sure it was marginalized. "If a government led by Hamas or in which Hamas is a coalition partner is established, the Palestinian Authority will be turned into an authority that supports terror. Israel and the world will ignore it and make it irrelevant," he declared.

That was strong rhetoric, so as to ensure he cannot be portrayed as being too conciliatory by parties on the Israeli right, especially the Likud headed by Benjamin Netanyahu. But also no announcement of immediate punitive measures against the Palestinian Authority, so as not to invite pressure from an international community that was equally shocked and disappointed by the results, but which finally got what it wanted -- a democratic election in the Arab world.

In the wake of the Hamas victory, Israelis are asking themselves two questions: will it send the moribund diplomatic process into an even deeper freeze, and what impact will it have on the outcome of their elections on March 28.

Olmert is likely to adopt a wait-and-see approach. He knows that taking measures aimed at punishing a Hamas-led government, like holding back vital funds in the form of tax duties that Israel forwards to the Palestinian Authority, will raise eyebrows in the United States and in the European Union (EU).

Even though the Americans and the EU have listed Hamas as a terror organization, their almost sanctified goal -- especially that of U.S. President George W. Bush -- of spreading democracy throughout the Middle East will make it impossible for them to delegitimise the results, at least until it becomes clear how Hamas behaves once in government.

The Americans have got what they wanted: a democratic election in an Arab state -- or a quasi-state in the case of the Palestinians -- in the Middle East. But democracy, as they found out this week, has a price: you cannot choose the winner.

The positions adopted by Hamas in government will be critical. If the organization continues to trumpet its refusal to recognize Israel's right to exist and supports attacks by its armed wing on Israelis, the new Palestinian government will find itself isolated.

If it refrains from attacks, then international pressure will grow on Israel to engage the Islamic movement. Over the last year, Hamas has largely adhered to the period of calm agreed by Israel and the Palestinians, and in the immediate aftermath of the election some of its leading figures declared that they were ready to extend the truce.

After the success of Hamas became clear, Israeli leaders united in their conviction that Israel should not engage the Islamic group, which carried out most of the suicide bombings during the second Intifadah uprising.

Amir Peretz, the new leader of the left-wing Labor Party, who has spoken of the need to re-engage the Palestinians around the negotiating table, declared that Israel would now have to continue taking unilateral measures in establishing its borders, since talks with Hamas were not feasible.

"We will not negotiate with a party that does not recognize Israel's right to exist," he said. "If we have to, we will take unilateral measures...we will not become hostages to the changes in the Palestinian Authority."

Politicians were also quick to apportion blame for the success of Hamas. Likud leader Benjamin Netanyahu, who resigned last year in protest over the Gaza withdrawal, which Olmert strongly supported, declared that the unilateral pullout had strengthened hardline Palestinian groups like Hamas and contributed to its electoral victory.

"The state of Hamastan has been created in front of our very eyes, a satellite of Iran, in the image of the Taliban," he said. "The policy of unreciprocated withdrawals was a reward to Hamas terror."

Hamas's victory, it would seem, is most beneficial to Netanyahu and the Likud, which has been in a state of electoral meltdown ever since Sharon left the party last November to set up a new party called Kadima (Forward).

Their prospects will improve if violence reignites in the period leading up to the elections. If suicide bombers again make their way into Israeli cities, the right-wing bloc, which has been faring very poorly in opinion polls, is likely to experience a resurgence.

If the violence remains muted, however, it could be Kadima, which Olmert now heads, that turns out to be the main beneficiary of the Hamas victory.

Even more than Sharon, Olmert has been a firm believer in the unilateral approach to the Israeli-Palestinian conflict, which is based on the belief amongst many Israelis that Israel cannot continue to control 3.5 million Palestinians, but that there is no partner on the Palestinian side with whom to make peace. The only remaining option, therefore, is for Israel to unilaterally determine its borders with the Palestinians.

This view, which made Sharon's decision to unilaterally exit Gaza so popular amongst Israelis, will have been strengthened by the ascendance to power of a party that does not recognize Israel's right to exist. Ehud Olmert will certainly be hoping Israelis interpret the election results this way.