Thankfully, some signs of lucid thought seem to be creeping into Israel's reaction to the Hamas election victory. Ambassador to the US Danny Ayalon, at least, realizes that cutting off all money to the Palestinian Authority will cause a "humanitarian disaster," telling Reuters, "[W]e will have to consult and find some mechanisms and ways to make sure that the Palestinian people do not suffer." Haaretz reported that Bank of Israel Governor Stanley Fischer "said formation of a Hamas government would not necessarily mean a return to violence, noting the group has largely honored a cease-fire over the past year. If the situation remains calm, he said, economic relations... could continue." I hope this attitude spreads fast in Israel, as well as in the US and Europe, because if the democratic world actually follows through on its hysterical threats against Hamas, I'm afraid it's going to turn a bad but tolerable situation into something like a disaster, and not just a humanitarian one. Do people really not understand that punishing the Palestinians for voting for Hamas - after the US and Europe demanded that the election be held - is going to send Hamas's popularity shooting through the roof? That it's going to fuel Palestinian rage, and understandably so, against the West for trying to force them into re-electing the now-despised Fatah mafia? That it's going to make laughable hypocrites out of the Bush administration and all the other Judeo-Christian soldiers for Middle East democracy? Finally, if Palestinian society doesn't keep getting aid from the West and tax remissions from Israel - which together account for over 75 percent of the PA's $2 billion budget - isn't it clear that a Hamas-led PA will turn to oil-rich Iran to help make up the difference? IS THAT the sort of vacuum that Israel, the US and Europe want to create in the West Bank and Gaza with their threatened boycott? Who's threatening whom? I agree that money should not be given to the incoming PA government if it's likely to be transferred to militias and used for weapons to attack Israelis; maybe the money will have to be given to NGOs or through other "mechanisms and ways." But it's a little ironic for people to raise this concern now, with Hamas a year into its tahdiya, or lull in violence, while Fatah's Aksa Martyrs Brigades, along with Islamic Jihad, keeps blasting away as best it can. "The volume of terrorism perpetrated by [Hamas] has declined steadily since the summer of 2004... Since the withdrawal of Israeli settlements and troops from the Gaza Strip, it has not fired a single rocket at Israel," wrote Ehud Ya'ari, Israel's leading journalist on Arab affairs, in The New Republic this week. (Ya'ari nevertheless favors a diplomatic and economic boycott against the incoming PA, arguing that Hamas is "sheathing its claws" for a war against Israel way down the road. That's an opinion, though; his reporting of Hamas's recent past is fact.) So, judging not by covenants but by the way the battle has been going on the ground, Israelis are more likely to come under terror attack if the PA's money goes to the militias of Fatah than to the militias of Hamas. And so, still judging by deeds instead of words, Hamas not only can become more moderate, it has become more moderate, at least in the last year-and-a-half. I'm not a flower child. I'm not saying Israel should try to bury the hatchet and make peace with Hamas like it did with Egypt and Jordan, and like it tried to do with the PLO. I don't even want anybody to draft some tortuously worded statement that Hamas might sign so everyone could pretend there's still a peace process, or a road map or whatever. And I definitely don't want Israel to stop going after active terrorists in Gaza and the West Bank, whoever they belong to. It's no coincidence that Hamas began backing away from terror only after a long, relentless Israeli offensive - including the killings of Ahmed Yassin and his successor Abdel Aziz Rantisi, whom Hamas promised to avenge but never was able to. But I do think it's possible to reach limited, informal understandings with Hamas, even if through third parties, to keep the confrontation from boiling over again. If it was possible with Hizbullah, why not with Hamas? When the IDF was in south Lebanon, it had on-and-off agreements with Hizbullah to contain the fighting, which saved civilian lives on both sides. Another agreement was reached just this past weekend, when two days of Hizbullah-IDF fighting ended in a cease-fire brokered by the UN and the Lebanese government. Between war and peace there's a lot of ground, and that is the ground Israel should be exploring with the PA once Hamas moves in. In diplomatic terms, Israel should downgrade its relations with the PA slightly, more in style than substance. There's not much to downgrade, anyway; Israel may have formally recognized the PA under Fatah, but the IDF has done most of the government's talking since the intifada ended the peace process. I don't see any reason why this shaky but tolerable status quo can't be maintained with Hamas. And given the record of the tahdiya, especially next to the record of Aksa Martyrs Brigades, things could even improve. Again: Compare Hamas and Fatah by their behavior, not their rhetoric. And above all, Israel, the US and Europe have to calm the hell down. They have to stop threatening to lay siege to the West Bank and Gaza, to try forcing Hamas into submission, to punish the Palestinians for rejecting democracy, Fatah-style. It's going to backfire. And if that happens, the doomsday predictions about the new Palestine could turn into self-fulfilling prophecies.