Article in Issue 25, March 30, 2009 of The Jerusalem Report. To subscribe to The Jerusalem Report click here. Hard bargaining is already under way in Cairo. Egyptian mediators are trying to persuade the rival Hamas and Fatah movements that an agreement to form a National Unity government is not necessarily a zero-sum game and that it is possible to attain a formula, according to which they can both gain something. This, however, is a very tricky exercise, because part of the deal will include holding elections, before January 24, 2010, for both the head of the Palestinian Authority and the Legislative Council. And elections mean that one side will be victorious and the other side is bound to be defeated. Egypt, with Saudi Arabia at its side, is attempting to carry out a complex maneuver to extricate Hamas from the embrace of Iran while, at the same time, bolstering the movement's more restrained wing (Dr. Mahmud Zahar in Gaza and Dr. Mussa Abu Marzouk in Damascus) at the expense of the more militant Khaled Masha'al in Damascus and Ahmad al-Ja'abari, the military chief in Gaza. Backed by the United States, the European Union, and - tacitly - Israel, the Egyptians are basing their gambit on a number of moves: â€¢ Completing the truce agreement between Hamas and Israel within the framework of indirect "understandings," in order to achieve pacification of the Gaza Strip and normalization at the border crossings. Concomitantly, a deal for the release of Gilad Shalit will hopefully be reached in order to stabilize the cease-fire. â€¢ Reaching an agreement - by the end of April - on the formation of a Palestinian "government of national consensus," composed of either technocrats or politicians, in order to put an end to the separation between Gaza and the West Bank and to give the Western states, and Israel too, an address for dialogue. â€¢ Flooding the Gaza Strip with money - a total of $5.4 billion was pledged before and during the Sharm al-Sheikh conference of donors. The basic idea is simple: Swing Gaza from launching missiles to launching rebuilding projects. â€¢ Endeavoring, in coordination with the Obama administration in the U.S., to bring about a resumption of negotiations between the Palestinians and Israel, backed by the Arab states or perhaps even with their participation, on a permanent settlement. It is very difficult at this stage to appraise the prospects for the success of this very ambitious policy. In private conversations, senior figures in the two Palestinian camps provide entirely different predictions. On the one hand, there is a broad front in both Fatah and Hamas that supports, or pretends to support a compromise. But on the other hand, the differences between the two sides' points of departure do not leave much room for optimism. Fatah wants to absorb Hamas into the PA and the PLO, without giving up control of either. Hamas sees the agreement, if it is reached, as the springboard for conquering both of those bodies. Fatah is confident that it can win an election in the Strip, while Hamas is equally sure of victory in the polls in the West Bank. There are deep differences over each and every one of the dozens of issues on the table in the Cairo talks. For example, Hamas rejects PA President Mahmud Abbas's demand that the agreements with Israel be honored, including the vision of two states for two nations. Fatah wants the Hamas military wing to be disbanded and parts of it absorbed into the security apparatuses of the PA. It will require a virtuoso level of flexibility and creativity to draw up a document that both sides will be able to sign. In any case, not even an ostensible agreement will mean the end of the confrontation, but only the configuration of new patterns for the struggle between the movements. So far, Israel has assisted the Egyptian efforts by allowing Zahar and other Hamas leaders to leave the Strip via the Rafah crossing, and, even more significantly, by refraining from more strenuous measures against the continued arms smuggling through the tunnels. Until now, the outgoing government of Ehud Olmert has not yet taken a public position on the components of the Egyptian plan and Benjamin Netanyahu has not found the time, amidst his coalition-making,, to clarify his stand on the issues. But it would not be appropriate for Israel to stick to the sidelines for long. The time is coming closer when Netanyahu, whatever the final composition of his government, will have to make it clear what Israel will agree to and what it will oppose. For example: Can Israel accept the participation of Hamas in the future Palestinian government, even if it is headed by someone like Dr. Salam Fayyad? How does Israel see the possible release by the PA of large numbers of imprisoned Hamas members and the rebuilding of the organization's infrastructure on the West Bank? How will Israel relate to the very real possibility that behind the shell of the "national consensus government," Hamas will retain exclusive control of Gaza and continue its military build-up? There are many such questions to be answered. The earlier that Netanyahu alerts Egypt's President Hosni Mubarak, the Americans and Europeans to those issues that worry Israel, the better. It's preferable that Israel's positions be taken into account during the bargaining in Cairo and that Jerusalem not be asked to bless a finished product without having presented its reservations beforehand. It is therefore essential for Netanyahu to convey his expectations and warnings to everyone concerned in the next two or three weeks. Israel has nothing to gain from suddenly becoming reticent. â€¢ Article in Issue 25, March 30, 2009 of The Jerusalem Report. To subscribe to The Jerusalem Report click here.