Palestinian Authority (PA) President Mahmoud Abbas was greeted in Ramallah by a crowd of thousands on December 2 after 138 countries voted at the United Nations General Assembly to grant the Palestinians non-member observer state status. The vote was seen as a significant personal victory for Abbas, who invested enormous time and effort to ensure its success.Palestinian observers say that after Fatah’s diplomatic victory at the UN and with Hamas perceived as coming out strongly in the Palestinian arena after remaining on its feet following Israel’s eight-day aerial assault on the Gaza Strip, as rockets rained down on Israel in mid- November, the time was ripe for Fatah and Hamas to make significant progress in talks on reconciliation and end five years of political division between the West Bank and Gaza.At the “victory” rally in Ramallah, Abbas told the crowd celebrating the UN decision that his next step would be to end the division with Hamas. His statement was greeted by the cry, “The people want to end the division.”Senior Fatah officials confirmed to The Jerusalem Report that Abbas is planning to visit Gaza for the first time since Hamas violently took over the Strip in June 2007.Meanwhile, local Fatah officials took part in a rally in Gaza on December 8, marking the 25th anniversary of the founding of Hamas, attended by the movement’s leader Khaled Masha’al.“Both Fatah and Hamas feel that they are in a powerful situation that enables them to show more flexibility to achieve reconciliation,” Hani Masri, a senior Palestinian political analyst tells The Report. “It’s not necessary that the new Palestinian vision would lead to an immediate cessation of PA commitments to the Oslo agreement,” adds Masri.But as the emotional mass celebrations ended in the West Bank, the Gaza Strip, East Jerusalem and refugee camps in Lebanon and Jordan, Abbas found himself having to face unpleasant realities on the ground. Finance Minister Yuval Steinitz announced that Israel would hold back some $120 million in taxes that it collects for the Palestinians. The move makes it impossible for the PA to pay its 170,000 employees their November salaries, a sum of some $200 million. Naser Abdulkarim, economics professor at Bir Zeit University tells The Report that the PA will be forced to seek the aid of the Arab countries. “It’s important that the Arab countries support the PA financially now and pay the $100 million commitment that they had made previously to enable the PA to overcome its financial crisis,” says Abdulkarim, otherwise “the PA will be in a critical financial crisis.”The PA, though, knows that support is readily promised, but not always forthcoming. The PA is already upset with Arab countries for failing to show up in force for the UN vote on observer status.Palestinian sources tell The Report that Abbas invited 22 Arab foreign ministers and booked them first-class tickets and fivestar hotels, but they did not show up.Fatah Central Committee member Azzam al-Ahmed criticized the Arab attitude in his talk show on MIX-MAAN TV on December 1. “They want to show solidarity with Hamas in Gaza under the Israeli bombing, but no one agreed to escort President Abbas to the UN,” he said.Some Palestinians do not see the UN vote as such a huge victory. “Gaining the support of the Israeli authorities in West Jerusalem for a Palestinian state is more important than the support of 138 countries that voted for Palestine at the UN,” Ibrahim Inbawi, a Fatah activist from East Jerusalem asserts to The Report.So after the celebrations, what happens next? A senior Fatah official tells The Report that Abbas does not intend to escalate tension with Israel and for the time being will not submit charges against it to the International Criminal Court (ICC), at least until after Israel’s parliamentary election on January 22. Some Western European countries that voted for the Palestinian state issue did so on condition that the PA would not go to the ICC. In response, the PA pledged to coordinate its moves within its new status with those countries to avoid provoking Israel.Meanwhile, though, Abbas is under pressure from Fatah youth and PLO factions to increase non-violent resistance across the West Bank in order to keep the world’s attention on the newly born Palestinian entity.Security coordination with Israel will, however, continue as before. The PA security services have not received new instructions from the political leadership, but Major General Adnan Damiri, Security Services Spokesperson points out to The Report that “the security situation in the PA after 29 November is certainly different from the day before.” The question is will Abbas agree to resume talks with Israel? Abbas feels strong and powerful following the UN vote and, as he said prior to departing for New York, that enables him to resume talks with the Israeli government. But, as Palestinian sources note, he will expect the resumption of talks to take place with new terms of reference. The PLO wants UN resolutions 242 and 338 to be the framework for any future negotiations with Israel, rather than the Quartet’s Road Map. The Palestinians have high expectations that the new US administration will propose a new road map within the next two months.The Palestinians feel boosted by the reaction to Israel’s announcement following the UN vote that it would build some 3,600 housing units in East Jerusalem and advance building plans in the crucial E-1 corridor connecting Ma’aleh Adumim to Jerusalem. “The anti- Palestinian camp in Europe has collapsed and now the EU is reviewing its attitude toward the Palestinians,” says Sabri Saidem, an adviser to Abbas.Yet on the ground even the PA expects little to change for the moment. “The most important matter for us now is how to put into practice our sovereignty over our land. However, as long as we live under the occupation, it will be difficult to practice such sovereignty,” a senior security official tells The Report.