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Israel is concerned a Hamas-Fatah unity government will create international pressure to negotiate with it even if it doesn't fully recognize Israel's right to exist, forswear terrorism and accept previous Israeli-Palestinian agreements - the Quartet's three principles.
Still, there is a large dose of skepticism in Jerusalem that the Palestinians - after the recent factional violence that has killed dozens of people - will be able to agree on a national unity government.
Palestinian Authority Chairman Mahmoud Abbas and Damascus-based Hamas leader Khaled Mashaal were scheduled to meet Tuesday in Mecca to discuss the matter.
Even if an agreement were reached, there was no guarantee, government officials said, that those in the field would accept it.
"Each side wants to prove that they have won," one official said. "There is no law and order in Gaza, and no heeding the directives of the political echelons."
Shin Bet (Israel Security Agency) chief Yuval Diskin recommended on Monday that Israel refrain from intervening in the factional violence in the Gaza Strip. He said that while Israel needed to prepare a contingency plan to deal with the Gaza Strip, now was not the time for a large-scale operation there.
"If we don't want to ruin everything then we should stay out of what is going on there," he said.
Before Israel launched such an operation, it needed to think about the "day after" and what would happen if the Palestinian Authority collapsed and no longer provided social services to the residents of Gaza, Diskin said. "If the PA collapses, then we will need to set up a Civil Administration in Gaza and care for the residents' welfare."
The parameters that needed to be taken into account before an IDF operation aimed at halting Hamas's military buildup inside Gaza were the pace of that buildup, the IDF's level of preparedness, and the violence between Fatah and Hamas. "Chaos in the PA does not serve Israel's interests," he said.
At the same time, a unity government there would place Israel in a delicate position, because there would be pressure on Israel to deal with the government even if it did not come out squarely behind the international community's three principles.
Diskin predicted a Palestinian unity government would lead to the lifting of the international aid blockade on the Hamas government and would eventually create pressure on Israel to engage the terrorist organization in a dialogue.
"A national unity government will allow for the lifting of the financial blockade on Hamas and we will then see a massive flow of funds to the Palestinian government," he told military correspondents during an annual briefing at Shin Bet headquarters. Hamas, he added, would enjoy newly gained legitimacy and the international front against the group would crumble.
While Hamas had much to gain from the establishment of a national unity government, Diskin said he was doubtful that such a deal would be struck during Tuesday's meeting in Mecca.
"This is mainly in Abbas's interest," Diskin said. "Hamas is not rushing to make such a deal."
Diskin said that while Hamas might be open to a long-term cease-fire with Israel, the movement was not showing any flexibility regarding its refusal to recognize Israel's right to exist.
"Hamas has not changed its ideology at all," he said. "According to them, all of the Land of Israel belongs to the Muslims and there cannot be any compromises."
Prime Minister Ehud Olmert's chief of staff Yoram Turbowicz and his foreign affairs adviser Shalom Turgeman, meanwhile, have been busy in recent days trying to convince key players in the international community to remain firmly behind the international community's three principles even if a unity government is formed.
Israeli diplomatic officials said they were encouraged that despite Russian attempts get the Quartet to lift the siege of Hamas, the Quartet came out with an unequivocal statement after its meeting in Washington on Friday about the need for the PA government to accept the criteria for legitimacy.
The Quartet statement spelled out the three international principles and "reaffirmed that these principles endure. The Quartet reiterated its call for the PA government to commit to these principles."
Israeli officials pointed out that this was a stronger commitment than a statement issued by the Quartet at its previous meeting in September, when a statement was issued that called on Abbas to form a unity government whose platform would merely "reflect Quartet principles."
The feeling in Jerusalem is that the US, Germany - which holds the rotating presidency of the EU - and Britain would not agree to a watering down of the criteria in exchange for the creation of a unity government that would nod in the direction of the criteria, but not fully accept them.
However, there is concern that Russia, France and possibly Italy would be willing to compromise on these principles and find a way to legitimize the government if it broadly implied acceptance of the principles.
One diplomatic official said that if Hamas, as part of its agreement to a unity government, would declare a willingness to talk with Israel - something it has said in the past it would not do - this would be seen by part of the international community as an implied acceptance of the three principles, and Israel would be hard pressed to say that it would not be willing to open talks with this government.
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