We are living through exciting times. After two dramatic elections - in the Knesset and in the Labor Party - that did credit to our democratic institutions, we have a new president who will bring honor and dignity to that august office, and in a very short time we shall have a new Olmert-led government. After a long absence, a full-time, presumably honest finance minister will join the government, and there will be a new defense minister who will, hopefully, prove to be a born-again Barak devoid of his past faults. In addition to all that, we have a crucial visit to Washington by our prime minister in a few days' time and, if that was not enough, we see our next-door neighbors tearing each other apart. Our news-hungry Israelis are certainly having their fill these days. Four victors have emerged from this news-packed week. The first three: Shimon Peres, Ehud Barak and, not less, Ehud Olmert, who has seen his hold on office greatly strengthened as he puts the finishing touches to the formation of his new government. The fourth victor is the fanatic, fundamentalist, intransigent, gun-toting Hamas fighter who thinks nothing of killing his fellow Palestinians in the name of Islam. The present government has excelled in doing nothing since the war in Lebanon - no new ideas, no initiatives - except for Olmert's surprising call for a multinational force in Gaza, which he made in a conversation with the Dutch foreign minister this week and which he will discuss in Washington next week. The next government will not enjoy the luxury of doing nothing. Somalia, or perhaps it would be more accurate to say Afghanistan, is on our doorstep: The Palestinian Authority is in danger of collapse. If the PA disintegrates, the responsibility for the well-being of the Palestinians could once more be thrust onto Israel, with all that this entails. Not only is there the heavy economic burden, but also it would undo much of the effort to keep the two peoples apart. "They are there and we are here," in the words of Barak. Even more to the point, the collapse of the PA could endanger the entire concept of a two-state solution, which, despite what some of our more irresponsible hard-liners think, is essential for the future of a Jewish, democratic state. There are, indeed, a growing number of proponents among the Palestinians for a one-state solution. Just like our own hard-liners, they reject the idea of two independent states existing side by side in peace between the Mediterranean Sea and the Jordan River. Some of them even go hand in hand with our own extremists in rejecting the end of the occupation for, according to their way of thinking, the occupation - believing the tensions it causes in Israel and ongoing conflict with the Arab world will hasten Israel's internal collapse. Let the occupation continue, they say, and Israel will gradually weaken until it eventually disappears. That, of course, is not going to happen. Yet the danger of a collapse of the two-state solution is very great, and with Hamastan in Gaza, it has now become much greater. The longer the occupation continues, the less likely that the two-state solution will be feasible. The longer it continues, the higher the number of advocates in Europe and elsewhere for the delegitimization of Israel. And, as nearly all of us know by now, one state between the Jordan and the Mediterranean entails the Jewish people becoming a minority in that state, a sad end to the Zionist dream. SO WHAT will the new Olmert-Barak government do about the situation in Gaza and about our relations with the Palestinians? It is safe to say that this question will be the centerpiece of the prime minister's discussions in Washington. It is equally safe to say that the Americans will demand that we be more receptive to the needs of the Palestinians in the West Bank, in order to strengthen the moderates there and to weaken Hamas. But what to do with Gaza? The last thing that Israel should do is to become involved in the internal fighting there. Yet Israel cannot ignore the danger posed by an Iranian-backed, heavily armed, Hizbullah-style Hamas militia so close to our population centers in the South. A massive military strike to reoccupy the Gaza Strip with its one and a half million inhabitants is one option that many Palestinians want us to take, but neither the government nor army relish it. Our army would become bogged down in the Gaza quagmire and that could beckon the Syrians and Hizbullah to try their luck in the North. The multinational force is another option. It will not, however, be easy to implement. Iraq, Afghanistan, Lebanon and other hot spots around the globe are keeping international forces stretched to their limits. A third option is to continue our present policy. If Kassams continue to fall on Sderot, we react with precision strikes against those responsible. Otherwise, we do nothing. That may be the easiest option for the government to take. But it will not solve the danger that Hamastan represents in the South. Nor does it tackle the long-term hazard that a collapse of the PA could entail. Doing nothing with the Palestinian problem is a convenient way out of the impasse for now, but is asking for trouble in the future. Olmert's visit to Washington could not have come at a more propitious time. He needs to discuss the dangers and the options. He should stress that Hamastan is not only a threat to Israel but is a danger for the entire region. Every dark cloud has a silver lining. What has happened in Gaza should galvanize the US, Europe and, in particular, the Arab world into action to find a way out of this Palestinian imbroglio. For the new Olmert-Barak government, it is the supreme challenge. Unlike the present government, it needs to take initiatives. It will be judged largely according the decisions it takes on this vastly complex subject.