The government is taking some diplomatic flak for deciding that Saturday's swearing in of the Hamas-led Palestinian parliament would trigger its cutoff of transfers of some $50 million a month in Palestinian tax revenues collected by Israel. Some of this may be deserved, because Acting Prime Minister Ehud Olmert had previously led the international community to believe that this step would not be taken until a Hamas-led government was appointed. But the mistake was, in the first place, trying to finesse what Hamas's victory meant, and what was incumbent on Israel and the international community to do about it. When Hamas won, our government's initial instinct was contradictory. Israel wanted maximum pressure on Hamas, however improbably, to change its positions, without having to completely pull the plug on the Palestinian Authority and force its collapse. The international community, which was in almost as much shock as Israel was in the wake of Hamas's win, felt similarly and signed on to Israel's conditions delineating Hamas's required transformation. We should remember that Israel did suspend the tax transfers to the PA for part of 2002, but the payments were resumed under pressure from the US. The transfers continued even after Prime Minister Ariel Sharon stated, in January 2003, that the "Palestinian leadership continues to support, fund, and initiate terror." The real question, then, is not why is Israel cutting off the money now, but why was Israel collecting and handing over millions of dollars each month to the PA it blamed for terrorism? The somewhat uncomfortable truth is that Israel has been loath to see the PA collapse, even as it was understood that the PA was deeply complicit in terrorism. The reason for this is a practical one: Israel has been afraid that the blame for anarchy or a humanitarian crisis that might ensue in the wake of a PA collapse might be placed at our doorstep. But this notion seems to ignore the fact that the PA is, to a large extent, already collapsing. The PA, at this point, is in good part merely an employment agency for thousands of Fatah "activists." The Palestinian areas are degenerating into armed fiefdoms - itself a factor in explaining Fatah's defeat. The PA had not been willing or able (it hardly matters which) to save itself, let alone fulfill its own commitments to dismantle the terrorist groups that continue to attack Israel. Now one of these terrorist groups has taken over the PA. Grimly holding on to the idea that a PA of this nature should be preserved, with Israeli and Western assistance and for the purpose of combatting terrorism, must be considered an act of fantasy. The international community is miffed that Israel has begun to reject this fantasy now, rather than waiting for the new Hamas government to be sworn in. This, surely, must be considered a quibble. Or does the Quartet seriously believe that Hamas will opt to destroy and disarm itself? Israel needs to keep its own and the Quartet's eye on the ball: Western financing should be linked not to whether Hamas can be arm-twisted into accepting some vague formula, such as support for Saudi Arabia's defunct diplomatic initiative, but to whether the PA has become, or presides over, a realm of terror. In its January 30 statement, the Quartet linked its continued funding of the PA to a Palestinian leadership "commitment to the principles of nonviolence, recognition of Israel, and acceptance of previous agreements and obligations, including the road map." The trouble is that the international community, often with Israel's participation, has a long history of financially supporting the Palestinian national project almost regardless of the form it takes, the goals it endorses, and the means it chooses. Why should Hamas believe things have changed? This is not a question of timing but of substance. It is a question of whether Palestinian statehood is, as President George W. Bush declared in June, 2002, conditional on the Palestinians choosing to create a lawful, peaceful democracy rather than an aggressive terrorist state. The Palestinian people, it is widely argued despite the landslide electoral support for Hamas, wants the former. If so, the international community will be betraying that Palestinian people, not to mention Israel and its own interests, if it does not hold the PA leadership to the full requirements of democracy and peace.