According to a report in Yediot Aharonotthis week, Israel's Emergency Economic Administration has produced a report about what the next Arab-Israeli war will look like. The report comes at a time when Israeli military and intelligence circles are expecting some sort of Hizbullah attack in response to the February 12 assassination of its leader, Imad Mughniyeh. The report describes a "reasonably grave" situation rather than a "worst case scenario." But it's bad enough. The Emergency Economic Administration predicts that the next war would last a month. There would be "missile barrages hitting the greater Tel Aviv area and other urban conglomerates, a total shut-down of Ben-Gurion Airport, roads bombed incessantly, nationwide power cuts for many hours and the collapse of the water supply....." This is not the Iran nuclear nightmare scenario, the realization of which requires a technological breakthrough. It is rather an attack that could happen right now. So what is Israel doing about it? Certainly, the Israel Defense Forces is preparing to defend the country in the event of such an attack. Even more certain is that the IDF is capable of hitting back hard in response (Defense Minister Ehud Barak has made the issuing of dire threats, with references to Israel's "long arm," a specialty). The knowledge on the part of its enemies that Israel will respond strongly is itself a deterrent. And, as we see in this report, the government is working to mitigate the economic impact of the next war. But neither the Israelis (nor their American allies) are doing very much to prevent it - although they do go through the motions. Vice President Cheney, for instance, said last week that a Palestinian state was "long overdue" and spoke about the need for "painful sacrifices" by Israelis and Palestinians to achieve it. But he also ruled out any change in US policy toward Hamas. He insists that Hamas has to accept US and Israeli demands before we accept its participation in a Palestinian unity government or a role in negotiations -demands Hamas has repeatedly rejected. How Cheney would achieve the "long overdue" establishment of a Palestinian state is a mystery. THE GOOD news is that Prime Minister Ehud Olmert has apparently reached an agreement with President Abbas on the key issues dividing Israel and the Palestinian Authority, including refugees and Jerusalem. Israeli and Palestinian sources say that the agreement meets the security and political needs of both sides. Not surprisingly, the tentative agreement tracks the so-called Clinton parameters, the plan President Clinton proposed in 2001 as his term in office was ending. After eight years and much bloodshed, mainstream Israelis and Palestinians are ready for it. But they won't have it unless the Palestinians establish a unity government, something the United States and Israel oppose. Both Washington and Jerusalem went out of their way this week to express indifference to the negotiations taking place in Yemen between the various Palestinian factions, indifference coupled with warnings to Abbas not to even think about a Palestinian unity government. By himself, however, Abbas cannot deliver the Palestinians - not when Gaza is under Hamas control. And Israelis won't make the "painful sacrifices" Cheney alluded to unless they know that an agreement - whether on a cease-fire or on final status issues - is binding on Hamas as well as on Fatah. For an agreement to work, all the relevant parties have to be included - not just the ones we think are lovely people. The problem with the Gaza withdrawal of 2005 was that it was unilateral. The Palestinians made no commitments when Israel left because they weren't even consulted on the leaving. This is absurd. That is why Olmert and Abbas can't move ahead with their agreement; it is unenforceable unless Hamas signs on. During his recent visit to Washington, former Israeli Foreign Minister Shlomo Ben Ami made just that point to senior Bush administration officials and in his public appearances. Ben Ami believes that US and Israeli efforts to perpetuate the Hamas-Fatah split are utterly wrongheaded. He says that the United States and Israel must change their strategic objective in Gaza "from toppling Hamas to rescuing . . . the last chance for a two-state solution. This requires not only a cease-fire with Hamas, but also a return to a Palestinian national unity government . . . which can offer the peace process the vital legitimacy that it lacks today." Ben Ami believes that including Hamas in the negotiating process won't harden Palestinian positions because even the Fatah moderates now negotiating with Israel cannot accept an "agreement that the extremists could label as a treacherous sell-out. Hence, the difference between the Palestinian positions in the current negotiations and those they may hold when a unity government is restored would only be very minor." In other words, it's time to start dealing with reality. Hamas, like it or not, is reality. Isn't it smarter to deal with it now rather than after the next war? The writer is the director of Israel Policy Forum's Washington Policy Center.