A Palestinian police officer gestures as he and other supporters of the Islamic group Hamas gather Friday during a demonstration, in Gaza City.

JERUSALEM – A June truce between Israel and Gaza’s Hamas rulers comes up for renewal next month and it looks like both sides are trying to dictate more favorable terms.

That would explain why Israel and Hamas have been trading rocket fire and air strikes for two weeks, even as they keep saying they’re interested in a continued cease-fire. But the attempt to establish new ground rules could easily spin out of control, especially if there are civilian casualties.

Domestic concerns further complicate the situation.

Israel is holding general elections Feb. 10 and the cross-border violence has become campaign fodder.

Over the weekend, the hard-line opposition party Likud predictably portrayed the government as weak for not responding more harshly to the rockets. Put on the defensive, the leaders of the ruling Kadima and Labor parties delivered tough speeches, warning Hamas that Israel would strike a punishing blow if necessary.

Yet a high-risk Israeli offensive in Gaza seems unlikely ahead of the election. And at a time of political transition in the United States, Israel might not want to start its relationship with Barack Obama in crisis mode.

Yet continued rocket fire from Gaza would hurt the election prospects of Kadima and Labor and could turn the public mood against a key election promise of both parties — to keep trying to forge a peace deal with the Palestinians.

Hamas, meanwhile, is trying to fend off criticism at home, particularly from smaller militant factions, that it accepted a bad deal and that the cease-fire hasn’t improved life in Gaza. The territory has been under an international blockade since the violent June 2007 takeover by Hamas.

The Egyptian-brokered truce took hold June 19 and was to be renewed after six months. The details were never made public, but the general idea was for Israel to allow more goods into Gaza, which has suffered from chronic shortages under the sanctions.

This was to be followed by negotiations on the release of an Israeli soldier held by Hamas-allied militants and by the eventual opening of the Rafah border crossing between Gaza and Egypt.

The truce largely held, though Israel has closed the borders for brief periods in response to occasional rocket or mortar fire from Gaza. But even when the crossings did open, Israel never allowed in more than a trickle of goods. Negotiations over the captured soldier, Gilad Schalit, bogged down and Rafah, Gaza’s main gateway, remained closed.

On Nov. 4, this uneasy balance was upset.

Israeli forces moved 300 yards meters into Gaza to destroy a border tunnel dug by militants. Israeli Defense Minister Ehud Barak said at the time that militants’ had planned to abduct Israeli soldiers through the tunnel, similar to the 2006 capture of Schalit.

However, defense officials acknowledged that Israel also was also trying to send a message that it would not allow Hamas militants to operate close to the border.

Hamas responded with barrages of rockets and mortars on Israeli border communities. Israel, in turn, targeted rocket squads with air strikes, killing at least 15 Palestinian militants, including four on Sunday.

Israel also stepped up pressure by keeping Gaza’s borders closed, causing widespread power cuts, disrupting U.N. food distribution to the needy and drawing international condemnation.

Hamas raised the stakes by firing several longer-range Grad rockets at the Israeli city of Ashkelon. By taking aim deeper inside Israel with the deadlier Grads, rather than at small border communities with crude homemade rockets, Hamas was trying to boost its powers of deterrence.

The idea is to “force the occupier to respect our people’s rights and demand and stop all sorts of aggression against our people,” said Hamas spokesman Fawzi Barhoum.

Israeli critics of the truce have repeatedly warned that Hamas is using the cease-fire to amass weapons via smuggling tunnels and that Israel is losing the ability to take the initiative.

Hamas “determines the rules of the game, it determines the pace, it decides when to fire rockets on Israeli citizens and how many,” Gideon Saar, a senior Likud legislator, told Israel Radio.

Still, both sides have an overriding interest in a cease-fire.

Hamas needs calm in Gaza as it heads into a political showdown with its rival, moderate Palestinian President Mahmoud Abbas. Hamas contends that Abbas’ term expires Jan. 8 and says it will install its own president at that time, closing perhaps the last door to the elusive possibility of restoring national unity.

Israel, meanwhile, doesn’t want to be dragged into a major military offensive in Gaza. Barak that would risk the lives of Israel soldiers for uncertain gains.

Reoccupying Gaza would at best bring temporary calm, but more likely bog down his forces without an exit strategy. It would also distract the military from other key challenges, including the threats from Iran and Lebanon’s Hezbollah guerrillas.

“Fiery rhetoric is not a policy,” he told his right-wing critics Saturday.

Karin Laub has covered the Israeli-Palestinian conflict since 1987.

The chaotic scenes on the Gaza-Egypt border are forcing Israel, Egypt and the international community to rethink a two-year policy of trying to weaken Gaza’s Hamas rulers by keeping the territory sealed.

The Hamas-engineered border breach, in which hundreds of thousands of Palestinians broke out of blockaded Gaza this week, highlights the movement’s resilience and ability to stir up trouble.

It also reminds the world that 1.5 million Gazans, many already bitterly poor, cannot remain locked up indefinitely.

Any easing of the Gaza closure could well stabilize Hamas’ militant government in the coastal strip, something the West would be loath to see. It’s also unlikely all those with conflicting interests in Gaza, including Israel, Hamas and pro-Western Palestinian President Mahmoud Abbas, could agree on a solution.

Yet, a more relaxed Gaza border regime could entice Hamas to halt rocket fire, and this in turn could buy Abbas and Israel the necessary calm to make progress on a U.S.-backed peace deal.

The current border crisis developed at breathtaking speed, typical of Gaza’s volatility.

It started last week with what Israel says was the inadvertent killing of a son of Gaza strongman Mahmoud Zahar in an Israeli arrest raid.

Hamas retaliated with rocket barrages on Israel, and Israel struck back by sealing Gaza hermetically and cutting off fuel shipments. Several days later, Gaza militants blew down the border wall with Egypt, effectively ending the Israeli blockade, which had been tacitly backed by Egypt.

Since Wednesday, hundreds of thousands of Palestinians, largely cooped up after the Hamas election victory two years ago, have flooded Egypt, roaming the border area to shop and visit relatives.

Egyptian President Hosni Mubarak’s hands have been tied.

Under popular pressure in the Arab world to help the embattled Gazans, he couldn’t send his border guards to confront huge crowds.

In a previous major breach, after Israel’s pullout from Gaza in 2005, Egypt gradually restored control after four days, but a similar effort Friday was met by Hamas resistance.

Hamas militants driving bulldozers tore down more border fortifications, sending a brazen message to Egypt that Hamas expects to negotiate a new border deal. Egyptian forces pulled out and Hamas hard-liner Sami Abu Zuhri confidently declared the border would have to remain open.

Relatively unhindered movement of people and goods between Gaza and Egypt would solve many of Hamas’ problems. The almost complete closure of Gaza by Israel and Egypt in June, following the violent Hamas takeover of the strip, had made it difficult for Hamas to provide even basic services, and dissatisfaction among Gazans was rising.

Freedom of movement and a secure flow of supplies could turn that around quickly.

Egypt would likely not be eager to strike a deal with Hamas — the Islamic militants are an offshoot of the pan-Arab Muslim Brotherhood, which leads opposition to Mubarak in Egypt. A closed border with Gaza for the last two years had been a convenient way for Egypt to keep out Hamas-style militancy.

It’s unclear whether Mubarak will now be forced to accept some border traffic with Gaza.

Israel, meanwhile, has been watching from the sidelines, not entirely opposed to the turn of events.

A strong Gaza-Egypt link would be supported by many Israelis — including Deputy Defense Minister Matan Vilnai — who believe Israel should cut all ties with Gaza, a territory it occupied for 38 years, before withdrawing in 2005.

Israel is still considered by the United Nations to be largely responsible for Gaza since it controls most access, as well as Gaza’s airspace and coastline. Israel could try to unload such responsibilities. After the border breach, Israel quickly halted emergency fuel shipments, pointing out that there was no longer a need for them because of the new opening to Egypt.

Yet, Israel is worried about traffic of militants and weapons between Gaza and Egypt, including the influx of Iranian-trained or al-Qaida-linked terrorists to the region.

Israel on Thursday warned its citizens against visiting Egypt’s Sinai Peninsula, a popular vacation destination, amid concerns that Gaza militants slipped out and would now try to target Israeli travelers.

Reflecting Israel’s concerns, Defense Minister Ehud Barak said he’s still considering — but is in no rush — to launch a large-scale military operation in Gaza to counter rocket attacks from Gaza.

Abbas, meanwhile, is pushing a plan to have his forces take over the Palestinian side of the Gaza crossings. Details are sketchy, except that Abbas’ men would serve as buffers on the border.

The “Quartet” of Mideast mediators — the U.S., the United Nations, the EU and Russia — said in December it’s an idea worth studying. Following the border chaos, “the idea of the (Abbas) government controlling the borders in Gaza is getting more credibility,” Abbas’ prime minister, Salam Fayyad, said Friday. “The international community and many countries are supporting it.”

With such an arrangement, Abbas could regain a foothold in Gaza, after his troops were routed by Hamas in June. However, the Palestinian president has not explained how his men could operate in Hamas-run territory, let alone run border traffic effectively.

Abbas’ plan would also amount to tacit recognition of Hamas rule in Gaza, something he has adamantly refused to do since the takeover.

Israeli defense officials quickly shot down the idea Friday as impractical, though Barak was careful not to reject it outright in public, possibly because of international interest in the plan. However, without Israeli blessing, it’s unlikely the arrangement could get off the ground.

Karin Laub, AP’s chief Ramallah correspondent, has covered Israel and the Palestinian territories since 1987.

RAMALLAH, West Bank – Israel looks powerless to stop the barrage of rockets from Hamas-ruled Gaza.

The Islamic militants, choked by a blockade of their territory, find it increasingly difficult to hold on to power. And moderate Palestinian President Mahmoud Abbas is facing growing pressure to suspend peace talks because of Israel’s strikes in Gaza.

No one appears able to win the upper hand in this volatile three-way standoff, and only an Israeli-Palestinian peace deal or an Israeli reoccupation of Gaza would likely break through the deadlock.

Yet the persistent cross-border violence – the latest round killed 38 Palestinians and rained rockets on Israeli border towns – jeopardizes the very prospects for such an agreement.

During his Mideast peace mission last week, President Bush held out hope for an Israeli-Palestinian peace deal in 2008, but the latest fighting erupted while he was still in the region.

Even the current escalation – Israel cut off fuel supplies to Gaza and Hamas fired dozens of rockets – won’t change the basic equation.

Israel’s mighty military has not found a way to halt the crude rockets, short of a full-scale invasion of Gaza. Hamas can’t govern effectively because of the crippling economic sanctions, and Gazans are becoming increasingly vocal in their complaints about their rulers’ failure to provide basic services.

Abbas is too weak to regain control of Gaza. The TV images of Israeli missiles pounding Hamas targets and Gaza City’s residents huddling in darkness have deepened the image of Abbas as an ineffective leader, while Hamas has gained sympathy.

“We are entrenched in a reality in which no side alone can solve the problem,” said Israeli counterterrorism expert Yoni Fighel.

Yet it’s extremely unlikely the three could find a way to coexist.

Israel says it won’t negotiate a cease-fire deal with Hamas, for fear the militants, committed to Israel’s destruction, would exploit a lull to boost their already considerable arsenal. Since Israel’s withdrawal from Gaza more than two years ago, Hamas has smuggled large amounts of weapons through tunnels from Egypt.

Abbas distrusts Hamas, especially since the group wrested control of Gaza from him by force in June. He has tied his political fortunes to backing by the West, which rules out a partnership with Hamas.

Hamas fears it would be further isolated by progress in talks between Israel and the Abbas government, and has successfully disrupted negotiations in the past by carrying out attacks on Israel.

The latest round of fighting started almost inadvertently.

On Jan. 15, an Israeli undercover force entered Gaza on a routine arrest raid last and was spotted by Hamas gunmen who opened fire. Israeli aircraft unleashed missiles to help extract the force, the son of Hamas’ Gaza strongman, Mahmoud Zahar, was killed, and Hamas retaliated with rocket barrages on Israeli border towns, including one that hit a day care center.

Late Thursday, Israel sealed off Gaza completely, halting crucial fuel shipments, and a day later dropped a bomb on an empty Hamas government building as a warning of possible further retaliation. On Sunday, Gaza’s only power plant started switching off its turbines, as fuel supplies dwindled.

Hamas has scored some points in the latest round.

The Israeli military strikes have helped divert the growing dissatisfaction with Hamas rule, as Gazans close ranks against a common enemy. The rocket fire appears to be carefully calibrated, underscoring Hamas’ claims that it is in full control of Gaza, and thus the address in possible cease-fire talks with Israel.

The fighting also helps Hamas make Abbas look bad in the eyes of many Palestinians. The Palestinian president has denounced the Israeli airstrikes as “brutal,” but has not put negotiations with Israel on hold, even after 19 Palestinians were killed in a single day last week. Abbas would risk losing international support if he were seen suspending peace efforts.

On the downside for Hamas, a protracted closure of Gaza, following seven months of an almost complete blockade, could deepen poverty to such a degree that Gaza might become ungovernable.

For Israel, the sporadic bursts of fighting are an opportunity to keep Hamas off-balance and slow the militants’ systematic efforts to build their army. Since the Israeli pullout, Hamas has been able to smuggle some longer-range rockets into Gaza, and has found a way to stockpile once perishable Qassam rockets.

Israel has not been able to intercept the projectiles because their range of 6-to-7 miles is too short. In the hard-hit Israeli border town of Sderot, terrified residents get only very brief warning of a launch.

Israel’s government is in a bind.

The Israeli public is clamoring for a quick fix, but would likely not support a reoccupation of Gaza, which might require many thousands of soldiers and a call-up of reserve soldiers.

Only a rocket attack with many Israeli casualties would provide sufficient grounds for an offensive, said Israeli historian Michael Oren. “Once that happens, they’ll move into Gaza with 20,000 to 30,000 troops,” he said. If Israel moves without sufficient provocation, “it will look like flagrant aggression.”

Abbas and his aides, meanwhile, complain that Israel is using the Gaza quagmire as an unfair pressure tool in peace talks. Israeli Prime Minister Ehud Olmert has said there will be no peace deal unless the Palestinians halt rocket fire, a position endorsed by President Bush in his recent visit.

Yet Olmert has not said how he expects Abbas to do what Israel has been unable to achieve.

Abbas aide Nabil Amr said Israeli negotiators routinely raise the Gaza issue whenever their Palestinian counterparts demand that Israel halt West Bank settlement expansion, as required under a U.S.-backed peace plan.

“When we raise the settlements as a condition to continue (negotiations), they raise the legitimacy in Gaza,” Amr said. “The Israelis use it, and Abu Mazen (Abbas) cannot do anything because he is not there.”

Karin Laub, The Associated Press’ chief Ramallah correspondent, has covered Israel and the Palestinian territories since 1987.

PARIS – Hamas-ruled Gaza will likely see little of the unprecedented $7.4 billion in aid promised to the Palestinians by the international community on Monday.

While donor countries say they won’t ignore the growing suffering in that isolated territory, they don’t seem eager to channel large sums there that could inadvertently help prolong Hamas rule.

Still, the Islamic militants, pushed further into a corner, could emerge as perhaps the biggest spoiler of the renewed Israeli-Palestinian peacemaking that the economic aid is meant to buttress.

Hamas has successfully derailed past peace efforts with attacks on Israel. A barrage of rocket attacks could provoke the Israeli military into invading Gaza.

The angry reaction by Hamas officials on Monday indicated Gaza’s cash-strapped rulers were rattled by the huge amounts promised to their rival, moderate Palestinian President Mahmoud Abbas.

Hamas spokesman Sami Abu Zuhri denounced the Paris conference as a “declaration of war” on Hamas, while Hamas government spokesman Taher Nunu accused the international community of trying to bribe Abbas into making concessions in negotiations with Israel.

Participants of the pledging conference avoided clear answers on what to do about Gaza, which has been cut off from the world since the violent Hamas takeover in June.

Most expressed concern about the humanitarian situation, which has deteriorated sharply since Israel and Egypt virtually halted access to Gaza after the Hamas takeover. As a result, tens of thousands of jobs were wiped out, and three-quarters of the 1.5 million Gazans live in poverty.

However, most speakers did not call for a lifting of the blockade of Gaza, even as they urged Israel to ease restrictions on Palestinian movement, presumably in the Abbas-controlled West Bank.

Without calling openly for regime change, Western leaders have suggested that once the residents of Gaza see the benefits of peace, they’d become increasingly disillusioned with Hamas.

“In the end, if we get a strong process moving forward, I believe that all the Palestinian people will want to participate in a process leading to their own state,” international Mideast envoy Tony Blair said Monday, outlining his Gaza scenario.

Hamas has rejected repeated demands that it recognize Israel and renounce violence in exchange for international acceptance.

Palestinian Prime Minister Salam Fayyad emphasized Monday that his three-year economic recovery plan, for which he received the aid, also includes Gaza. However, many of the development projects earmarked for Gaza would likely have to be put on hold until the blockade is lifted.

In the meantime, some donor money would reach Gaza through continued salary payments to some 50,000 Abbas-allied civil servants who have stayed at home since the takeover, rather than work for Hamas.

Also, the donors have been funding international aid agencies that try to alleviate suffering, including with food distributions.

Naji Shurrab, a political analyst in Gaza, said that “it’s very clear that Gaza has been dropped from the (aid) plans, or at least has been postponed.”

“This is a form of punishment for Hamas,” he added.

Arab donor states, led by Egypt and Saudi Arabia, have been urging Abbas to try to negotiate another power-sharing deal with Hamas.

But Abbas made clear Monday that he will not trade vague promises from Hamas for the massive international support he enjoys now.

Using the high-profile stage in Paris, he dismissed Hamas leaders as “coup-seekers” and said he would not resume dialogue unless they handed back Gaza.

Persuading a hesitant Israel to ease restrictions on Palestinian movement in the West Bank is another day-after challenge for the donors. The World Bank has said that even massive aid will not lead to Palestinian economic recovery unless Israel relaxes physical and administrative obstacles to travel and trade.

However, it remains unclear whether the international community is willing to exert pressure on Israel, even with such large sums at stake.

Blair, who has been shuttling between Israelis and Palestinians, is proposing a step-by-step approach. He is trying to get several “rapid impact” projects off the ground with Israeli cooperation, such as setting up an industrial park in the West Bank and repairing a Gaza sewage system. These projects would be a test of Israeli intentions.

Israel has signaled it wants to go slow. “In the end, it comes down to the details, checkpoint by checkpoint, step by step for a better future,” Israeli Foreign Minister Tzipi Livni told the donors.

However, back in Jerusalem, Israeli Prime Minister Ehud Olmert quickly reassured his centrist Kadima Party that he would always put security first.

Politically weak ever since Israel’s war in Lebanon last year, Olmert needs to court hardline support, both from security hawks within Kadima and from two right-wing coalition partners, to stay in power.

This alignment would make it difficult for him to ease Palestinian movement in a significant way, or to declare a settlement freeze, as he is obligated to do under the U.S.-backed “road map” peace plan.

Yet for Abbas, quick improvements on the ground are vital. The Palestinians are skeptical of the current peace efforts, and Abbas will have to show his people that moderation pays.

The unprecedented aid effort is also closely linked to renewed Israeli-Palestinian talks, which could quickly be sabotaged by the old spoilers of Mideast peacemaking that have wiped out trust in the past.

“One or two serious suicide bombings, and no Israeli prime minister will be able to sustain this process,” said Israeli analyst Yossi Alpher.

The donors, meanwhile, appear to have learned from one past mistake – giving money without checking how it is spent. Over the past decade, more than $10 billion were given, with little to show for it today.

Some of the projects funded by aid were destroyed by Israeli-Palestinian fighting, but large sums were also squandered under Abbas’ predecessor, Yasser Arafat.

This time, the donors have built in tighter controls. While the donors were full of praise for Fayyad, a respected economist who helped clean up Arafat’s financial mess, they have also asked the World Bank and the International Monetary Fund to give them detailed reports every three months.

Karin Laub, AP’s chief Ramallah correspondent, has been covering Israel and the Palestinian territories since 1987. AP reporters Amy Teibel and Sarah El Deeb contributed to this report from Jerusalem and Gaza City.

RAMALLAH, West Bank – Tony Blair couldn’t ask for a better starting point as the new Mideast peace envoy.

The Palestinian uprising has fizzled, and Israel says it’s ready to work with a moderate Palestinian leadership after seven years of stalemate.

But the former British prime minister only had a limited mandate when he arrived in the region Monday, and despite his star appeal he could quickly become one in a long succession of well-meaning, yet ultimately ineffective mediators.

One note of caution has come from James Wolfensohn, Blair’s predecessor as envoy of the diplomatic Quartet, made up of the U.S., the U.N., the EU and Russia.

In 2005, Wolfensohn, a former World Bank president, was asked to oversee the rebuilding of Gaza after Israel’s pullout from the area. Wolfensohn accomplished less than he had hoped and recently told the Israeli daily Haaretz that his main problem had been a lack of authority.

“There was never a desire on the part of the Americans to give up control of the negotiations, and I would doubt that in the eyes of (Deputy National Security Adviser) Elliot Abrams and the State Department team I was ever anything but a nuisance,” Wolfensohn said.

Blair, who has two days of meetings scheduled with Israeli and Palestinian leaders, also has been given a relatively limited assignment: to prepare the ground for a Palestinian state by encouraging reform, economic development and institution-building. There is no mention of trying to help broker a final peace deal.

On the eve of the visit, Palestinian Prime Minister Salam Fayyad met in Jerusalem with Israeli Foreign Minister Tzipi Livni. Palestinian officials said they discussed Blair’s mission and other initiatives.

Dan Kurtzer, a former U.S. ambassador to Israel, said the Bush administration would hamstring the new envoy.

“Blair is entering the post with the exact same constraints that Wolfensohn did, which is a United States that says, ‘You will not engage in any issues related to final status. You are only going to deal with Palestinian institution building,’ ” Kurtzer told The Associated Press. “If he doesn’t expand his mandate, I would not be optimistic.”

Blair also will have to confine his work to the West Bank, since the international community continues to shun the Islamic militant Hamas movement, which has seized control of Gaza.

However, chances of transforming the West Bank are perhaps better than any time since the outbreak of Israeli-Palestinian fighting in 2000.

The violence, which left nearly 4,400 Palestinians and more than 1,100 Israelis dead, blocked any progress in peacemaking, but the uprising has run out of steam. Hamas, responsible for scores of deadly attacks, is largely contained behind Gaza’s border fences and on the defensive in the West Bank.

Scores of gunmen from moderate Palestinian President Mahmoud Abbas’ Fatah movement, meanwhile, have surrendered their weapons in exchange for an Israeli amnesty.

The new West Bank government will likely be receptive to Blair’s reform proposals. The caretaker Cabinet, installed after the fall of Gaza to Hamas, is headed by Prime Minister Salam Fayyad, an economist who helped clean up public finances during the era of Abbas’ predecessor, the late Yasser Arafat.

On a personal level, Blair can contribute political experience, negotiating skills, knowledge of the conflict – and enthusiasm. “I’m nothing if not an optimist,” he told a Quartet meeting last week.

But Palestinian reforms and economic development are closely linked to progress toward a final peace deal, and there’s no sign of that.

The Palestinians are eager to resume negotiations, but Israel says it’s too soon. Israel is willing to talk about general outlines of an agreement, but argues that negotiations can only begin once Abbas has disarmed militants and restored order in areas under his control.

“(Blair) may be able to get something done in terms of institution building and confidence building,” Israeli analyst Yossi Alpher said. “I don’t think he has any chance for anything you could call a spectacular success by any means. My guess is he’ll throw in the towel in frustration in about a year.”

Blair, who meets separately with Abbas and Israeli Prime Minister Ehud Olmert on Tuesday, starts his mission at a time of opportunity, Alpher said, but Blair’s close ties with President Bush and his support for the Iraq war may hurt his credibility in the Arab world.

Palestinian economist Samir Hleileh said he doesn’t expect any breakthrough under Bush, and says for any chance of success Blair must stick to his mission well beyond the 2008 U.S. presidential election.

Karin Laub, AP’s chief Ramallah correspondent, has been covering Israel and the Palestinian territories since 1987.

RAMALLAH, West Bank – Fatah’s old demons – lack of leadership, petty quarreling, corruption – have contributed to its dismal showing in the fight against Hamas in Gaza.

While the disciplined Hamas systematically built and hoarded weapons, Fatah failed to prepare for the inevitable showdown with the Islamic militants. In last week’s fighting, disorganized Fatah fighters were outgunned and overrun by the smaller Hamas.

Many angry West Bankers, watching the fall of Gaza on their TV screens, pinned the blame on Fatah’s leader, Palestinian President Mahmoud Abbas, seen as far too indecisive and detached to lead a countercharge against Hamas.

On Wednesday, even as Hamas besieged his forces in Gaza, Abbas tried to strike a neutral presidential pose, blaming both sides for the violence.

A day later, as the Preventive Security headquarters in Gaza City came under heavy fire, he hesitated before sending his Presidential Guard as backup; an hour later, Hamas captured the strategic compound.

“This wouldn’t have happened under Abu Ammar” – a reference to the wily Yasser Arafat, Fatah’s legendary founder and Abbas’ predecessor – was a common living room lament Thursday.

When Hamas launched its assault on Fatah’s security compounds in Gaza this week, no prominent Fatah leader was in the coastal strip to take command.

Gaza strongman Mohammed Dahlan, who had been Fatah’s main hope for fending off Hamas, was on extended leave in Egypt with a knee injury and, even before then, had spent much of his time dabbling in West Bank politics.

Fatah’s top security official for Gaza, Rashid Abu Shbak, moved to the West Bank last month after Hamas attacked his home in Gaza.

He joined one of Dahlan’s lieutenants, Samir Masharawi, who had already set up house in Ramallah several months earlier. The local Fatah chiefs left in Gaza didn’t have enough experience to fill the void.

The arsenals of Hamas and Fatah are difficult to assess because of the secrecy surrounding the arms buildup in Gaza.

Both sides have been smuggling weapons through tunnels under the Gaza-Egypt border, while Hamas, which is backed by Iran, also runs a flourishing homegrown weapons industry, producing mortars, rockets and grenades.

Fatah has more fighters, but Hamas gunmen are better trained. In recent days, Hamas also gained an advantage by seizing weapons and ammunition from captured Fatah positions.

Yet in the end, it came down to mind-set, not hardware. “Hamas has leadership, a goal, an ideology and funding,” said Gaza analyst Talal Okal. “Fatah has neither leadership, nor a goal, a vision or money.”

Left without a central command or plan, Fatah forces quickly disintegrated. In some cases, reinforcements were sent too late or couldn’t get through Hamas roadblocks.

At the northern security headquarters, which fell Tuesday, Fatah fighters said they had only two ammunition clips each while being pounded with Hamas mortars.

Hamas, on the other hand, moved step by step, taking over outlying posts before zeroing in on the major targets, Fatah’s four security headquarters in Gaza City.

A battle can’t be fought by mobile phone, complained Fathi Kader, a colonel in the Palestinian police, referring to Fatah’s faraway leaders.

Hamas fighters are driven by fundamentalist faith, but also by a desire for revenge. During 12 years in power, Fatah had repeatedly cracked down on the Islamists, including in 1996 when the Preventive Security Service, then led by Dahlan, arrested Hamas leaders and shaved their beards in an act of humiliation.

Venting their feelings, Hamas fighters kissed the ground after capturing the Preventive Security headquarters Thursday and then executed several security agents in nearby sand dunes, witnesses said.

In contrast, one of the leaders of a 1,500-strong Fatah militia, set up in February as a counterweight to Hamas, simply left for Egypt before last week’s decisive round, apparently because he hadn’t been paid. In recent years, Fatah fighters have also sold weapons to Hamas for profit, according to Issam Abu Bakr, a Fatah leader in the West Bank city of Nablus.

The stage for last week’s defeat in Gaza was set years ago when Fatah leaders failed to heed warnings that the party’s corruption and arrogance were alienating voters.

Such sentiments, along with the 2004 death of Arafat, brought Hamas to power in 2006. But even after its crushing defeat, Fatah failed to reform or resign itself to being in the opposition.

“Fatah has been disintegrating for a while, and no real attempt was made to renew the leadership,” said West Bank analyst Said Zeedani. Instead, Fatah’s activists were entangled in petty power struggles.

“Each four guys create their own group,” complained Abu Ali Turk, a party leader in the West Bank town of Tubas.

Abu Bakr, the Fatah leader in Nablus, said he hoped Fatah’s routing in Gaza would be a wake-up call for his movement.

On Thursday, Abbas-allied security forces rounded up dozens of Hamas activists as part of an attempt to prevent the Islamists from taking over positions in the West Bank, a Fatah stronghold. Fatah gunmen also seized several Hamas supporters, shooting three of them in the limbs, and set the Nablus office of Hamas legislators on fire.

“Perhaps it was a belated decision, but now we can stand against Hamas and defend ourselves,” Abu Bakr said of the West Bank campaign.

Abbas declared a state of emergency Thursday, fired the Hamas prime minister and formally dismantled the Hamas-Fatah unity government. This could help him cement control in the West Bank.

But these steps come too late for Gaza.

Karin Laub, the AP’s chief Ramallah correspondent, has covered Israel and the Palestinian areas since 1987. AP reporters Mohammed Daraghmeh, Ali Daraghmeh, Dalia Nammari and Ibrahim Barzak contributed.

RAMALLAH, West Bank – A Hamas military victory in Gaza would create a two-headed Palestine – with Islamic extremists in control in the coastal strip and Western-backed Fatah ruling the West Bank.

It could also set the stage for a bloody confrontation with Israel and strengthen radical states in the Middle East.

“It’s a lose-lose situation for the Palestinians and Israel,” said Uzi Dayan, former head of Israel’s National Security Council.

The battle for Gaza isn’t over, but Hamas militiamen have gained the upper hand, systematically seizing positions of Fatah-allied forces and taking control of the streets.

Fatah’s fighters outnumber the Hamas militia but have less firepower and lack motivation and leadership. Gaza’s Fatah strongman Mohammed Dahlan is getting medical treatment abroad, and the head of Fatah, Palestinian President Mahmoud Abbas, is increasingly perceived as timid and indecisive.

Perhaps that’s because Abbas has no enticing choices.

Even if he were to order a Fatah offensive in Gaza – and there is no sign he’s planning to do so – his demoralized forces may no longer be able to turn the tide.

Fatah’s threat to pull out of the coalition government with Hamas, formed three months ago, is largely meaningless because Abbas appears too weak to call early elections.

The most likely scenario is a divided Palestine, with Hamas running Gaza and Fatah the West Bank, where Hamas is relatively weak because of continued Israeli control.

The two territories, which lie on either side of Israel, are cut off from each other by strict Israeli travel bans imposed at the start of the second Palestinian uprising in 2000.

Rival governments in the West Bank and Gaza would finalize that split and push prospects of a Palestinian state even further away.

In that scenario, efforts to revive Israeli-Palestinian peace talks, including a recent push by moderate Arab states, would be dealt a big blow because Abbas could no longer claim to represent all Palestinians and would lose his credibility as negotiating partner.

A Hamas-run Gaza would likely seal the coastal strip’s pariah status and Israel could well block the borders, leading to a deeper humanitarian crisis. Already, two-thirds of Gazans live in poverty amid a punishing international aid boycott imposed after Hamas won parliamentary elections last year.

Israel’s options also are grim.

A Hamas victory in Gaza would put an Iranian-backed militia not just on Israel’s northern border, but also on its southern one.

In last summer’s indecisive war against Iranian-armed Hezbollah guerrillas in Lebanon, Israel was pounded by thousands of rockets that forced hundreds of thousands of civilians to flee.

Iran has also been arming Hamas, via smuggling tunnels under the Egypt-Gaza border, and a Hamas-controlled Gaza would likely give rocket squads freer rein. Already, Hamas militants have fired hundreds of rockets at Israeli border towns.

Israel may be forced to retaliate harshly to protect its civilians, even though previous military incursions into the densely populated territory have failed to halt the rocket fire.

More dramatic steps, such as cutting off water and electricity to Gaza, would likely create an uproar in the international community.

“They (Hamas militants) can create serious instability for us, and we are limited in our ability to retaliate,” said Hirsh Goodman, an analyst at the Israeli Institute for National Security Studies. “The situation puts us between a rock and a hard place.”

Israeli defense officials said Wednesday that Israel would not intervene in Gaza for now. Only if Hamas took over and started attacking Israel would Israel strike back, the officials said.

In a sign of Israel exploring ways out of the dilemma, Prime Minister Ehud Olmert on Tuesday floated the idea of an international force on the Gaza-Egypt border, a show of no confidence in Egypt’s abilities to stop the flow of arms.

The offensive in Gaza is driven by Hamas hard-liners, led by former Foreign Minister Mahmoud Zahar and Hamas’ military wing, Izzedine al-Qassam. It’s not clear, however, how much direction they are getting from Iran, Syria or from Hamas’ exiled supreme leader, Khaled Mashaal. The movement’s pragmatists, including Prime Minister Ismail Haniyeh, have been largely silent in recent days.

Hamas has not said how far it’s planning to take the fight. Even a takeover of all security positions would not translate into complete control of Gaza. Fatah remains a strong political movement, and its gunmen could try to regroup and wage guerrilla war against the new rulers.

“Hamas must recognize that its victory is going to be its defeat,” said Mouin Rabbani, an analyst with the International Crisis Group, an independent think tank. “It can’t control all the Palestinian Authority institutions in all the territories.”

Karin Laub is chief Ramallah correspondent for The Associated Press. She has covered Israel and the Palestinian territories since 1987.

JERUSALEM – Israel’s options for stopping Hamas rocket fire run from bad to worse.

Israel can halt the barrage on its border towns only if it reoccupies Gaza for good, military experts concluded after two weeks of lopsided fighting between Israel’s high-tech military and a few thousand Islamic militants armed with crude scrap metal projectiles.

However, a bloody invasion comes with many risks, including the possible collapse of the Palestinian Authority, and sabotages Israel’s goal of separation from the Palestinians, which began with its 2005 pullout from the coastal strip. Israel’s leaders are also gun-shy after last summer’s hasty — many say botched — war against Hezbollah guerrillas in Lebanon.

Yet, if Israel doesn’t take dramatic action, large amounts of weapons will likely continue to reach Hamas through smuggling tunnels under the Egypt-Gaza border. And an uninterrupted arms flow means Hamas can strike even harder — with longer-range rockets — in the next round of cross-border fighting.

“There is no military solution,” said Israeli military analyst Reuven Pedatzur. “For the last several years, the army tried several options. All of them did not succeed, not from the air and not from the ground.”

A diplomatic solution also seems far off. Israel won’t negotiate with Hamas, and moderate Palestinian Mahmoud Abbas appears powerless to rein in the militants.

Hamas stands to benefit more than it loses from almost any scenario.

Stepped-up rocket attacks on Israel have helped Hamas to regain some of the popular support it lost in months of internal fighting with Abbas’s Fatah movement.

If Hamas halts fire now and negotiates a new truce with Israel — the previous one lasted for five months — it can buy time to beef up its fighting strength and recover from the current round.

In the past two weeks, Hamas launched more than 250 so-called Qassam rockets, with a range of about six miles, many slamming into the border town of Sderot. Two Israeli civilians were killed in Sderot, and several thousand of its 24,000 residents have fled.

In response, Israeli warplanes pummeled Hamas targets, including training bases and rocket squads, with dozens of missile strikes, but the damage does not seem to be lasting.

Hamas’ 15,000 fighters were driven underground, but can emerge again during a lull. Israel killed about 50 Hamas gunmen, but new recruits are eager to take their place for the promise of a regular salary. Missiles destroyed 14 of 16 training camps, but they can easily be rebuilt because they consist of little more than open fields and a few shacks.

“If Israel continues demolishing our buildings, we can stay in tents,” said Islam Shahwan, spokesman of Hamas’ security branch, the Executive Force, which has about 6,000 gunmen. “Our soldiers can work from the streets, or even from their homes.”

Israeli Prime Minister Ehud Olmert has resisted growing popular pressure for a new military offensive, instead offering the public a dose of sober realism. “We don’t want to create unrealistic expectations that it’s possible to stop the Qassams totally,” he told his Cabinet on Sunday.

For now, Israel seems to be going for limited goals: reducing rocket fire and weakening Hamas.

The Cabinet has approved a plan of gradual acceleration, starting with air strikes on Hamas militants, followed by hits against the group’s political leaders, the reoccupation of Gaza’s edges to push back rocket launchers and — as a last resort — a ground offensive.

The military is moving cautiously because any escalation could trigger more rocket fire, said Alon Ben-David, military commentator for Israel TV’s Channel 10. “Israel is trapped from all sides. Any move will end with a barrage of rockets on this town,” he said of Sderot.

The head of Israel’s Shin Bet security service, Yuval Diskin, told the Cabinet that Hamas has developed longer-range rockets that can reach the Israeli port city of Ashkelon, six times the size of Sderot, but is holding off for now. Ashkelon might become a target if Israel takes aim at Hamas’ political leaders, as it had done in a series of assassinations in 2004, Ben-David said.

Only a Qassam hit with many Israeli casualties is likely to provoke an immediate ground invasion.

Legislator Yuval Steinitz of the hardline Likud Party is one of the few proponents of retaking Gaza, at least temporarily, saying a similar offensive in the West Bank in 2002 sharply reduced attacks on Israel.

“I think it’s a must for Israel to go into Gaza … to dismantle the terror network and destroy the rocket industry and then to pull out again,” said Steinitz, a member of parliament’s Defense and Foreign Affairs Committee.

The Shin Bet told the committee that more than 20,000 guns, about 1,000 anti-tank rockets and launchers, about 100 tons of explosives and several longer-range Katyusha rockets and anti-aircraft missiles were smuggled into Gaza in the past year, Steinitz said.

However, retired Israeli general Shlomo Brom argued that nothing short of an extended takeover of Gaza would suppress rocket fire. Previous short-term incursions also led to more rocket fire.

The price for reoccupying Gaza is high, wiping out the gains of the Gaza pullout and possibly triggering the collapse of the Palestinian Authority, Brom warned in a paper published by Tel Aviv University’s Institute for National Security Studies

Israel, as an occupying power, would then become fully responsible for the welfare of more than 3 million Palestinians, in Gaza and the West Bank.

Israel must “not succumb to illusions that there is a comprehensive solution to the Gaza Strip problem,” he wrote. Instead, it should “adopt more limited objectives at a lower cost.”

Israel’s options for stopping Hamas rocket fire run from bad to worse.

Karin Laub, the AP’s chief correspondent in Ramallah, West Bank, has covered Israel and the Palestinian territories since 1987.

JERUSALEM – The fighting in Gaza is laying bare a dangerous trend: Neither Hamas nor Fatah appears to be in control of its gunmen.

Furious over a two-month-old power sharing deal and eager for a showdown, the groups’ armed wings and their patrons – not the top political leaders – are calling the shots on the streets.

In a sign of their increasing weakness, Prime Minister Ismail Haniyeh of the Islamic militant group Hamas and President Mahmoud Abbas of the largely secular Fatah movement failed to make a cease-fire stick despite repeated attempts last week.

At the root of the latest fighting, which has killed more than 50 and wounded dozens, is the failure of the Hamas-Fatah coalition deal forged in March to address the key issue of who controls Palestinian security forces.

The government has also failed in its main task – bringing an end to an international aid boycott and leading the Palestinians out of isolation.

Discontent festered among Hamas hard-liners and in its military wing, which opposed the coalition deal from the start. In Fatah’s armed wing, many also clamored for a showdown, having refused to accept the Hamas election victory last year that ended decades of Fatah domination.

The spark came last week when the top Abbas-allied security chiefs moved 3,000 security officers loyal to Fatah into the streets of Gaza City, ostensibly as part of a law-and-order crackdown.

Hamas, which demanded greater control over the security forces, perceived the deployment as a provocation and set off a deadly round of fighting Sunday by killing a top Fatah militant.

Hamas and Fatah fighters appear about evenly matched, and fought to a draw in previous exchanges the past year. Hamas, which commands roughly 20,000 armed men, has the better organization, while Fatah has more fighters, though an exact count is difficult.

In casting blame at the other, each side said the order to seek a confrontation didn’t come from its rival’s leaders but from politically ambitious troublemakers and gunmen under their command.

“There is a mutiny” in Hamas, said Fatah spokesman Tawfiq Abu Khoussa. “The political leadership has no control over the military wing.”

One high-profile Hamas opponent of the power-sharing deal is Mahmoud Zahar, a former foreign minister who was not given a Cabinet post in the new unity government.

Hamas lawmaker Salah Bardawil accused Abbas security adviser Mohammed Dahlan, a Gaza strongman, of orchestrating a Fatah campaign against Hamas.

“The battle is clearly with (Dahlan and his allies) and not with Fatah as a whole,” Bardawil said. “Even Abbas’ control over them is limited.”

During the clashes, Dahlan was in Cairo, Egypt, recovering from a knee operation. He has denied in the past that he is running his own agenda.

Both Hamas and Fatah clearly anticipated another round of violence. During the two-month lull after the power-sharing deal, they stockpiled weapons smuggled through tunnels under the Gaza-Egypt border.

In another sign of careful preparation, Hamas gunmen used computerized lists of pro-Fatah members of the security forces in roadblock checks, said Col. Ali Qaisi, a spokesman for the Abbas-allied Presidential Guard.

“This is a pure and naked power struggle,” said Mouin Rabbani, an analyst with the International Crisis Group, an independent think tank.

The showdown has been further complicated by the involvement of Israel and the U.S.

Israel has chased Hamas militants out of their command centers with a barrage of airstrikes, a response to Hamas rocket fire at the southern Israeli town of Sderot. The Israelis also let 500 Fatah fighters trained in Egypt cross into Gaza last week.

Israel insists it has no plan to get into the middle of the Gaza power struggle, but its systematic targeting of Hamas has helped Fatah fighters.

The United States, meanwhile, has arranged for training and financial support for Abbas’ Presidential Guard, which is supposed to deploy men at Gaza’s border crossings and in anti-rocket units as part of a U.S. security plan.

This has given ammunition to Hamas’ claims that Fatah is conspiring with outsiders. Hamas TV on Friday accused three Fatah security chiefs of treason, alleging they were in contact with foreign security services.

Each side has reasons for seeking the confrontation now, rather than giving the unity government more time.

Those in Fatah who oppose the coalition administration may be gambling that the Gaza clashes will help bring down the government and speed up new elections, giving them a chance to reverse the movement’s defeat at the ballot box.

Hamas, meanwhile, has been spooked by warnings within Fatah that Abbas could resign if the government doesn’t succeed in lifting the international boycott by summer’s end.

That would bring a presidential election, and Hamas has strongly opposed any new ballot, saying it would amount to theft of its overwhelming election victory last year.

The government’s poor performance also has strengthened Hamas hard-liners who feel the militant group’s attempt to transform itself into a political party was a mistake.

The role of the supreme Hamas leader, Syrian-based Khaled Mashaal, is somewhat murky. He has backed the unity deal, but he has also threatened a new uprising against Israel if sanctions are not lifted and has denounced the U.S. security plan as a Western plot to force Hamas to surrender.

It’s not clear whether Hamas is using the fighting to try to get a better coalition deal – Haniyeh aide Ahmed Yousef demanded new negotiations – or wants a fight to the finish.

However, victory by force is unlikely for either side.

“Winning is losing,” said Rabbani, the analyst. “When the victory (means) eliminating a Palestinian rival, society won’t accept that.”

Karin Laub is The Associated Press’ chief correspondent in Ramallah, West Bank.

JERUSALEM – Israeli Prime Minister Ehud Olmert endorsed an emerging Mideast cease-fire deal late Friday, after a day of dramatic day brinksmanship including a threat to expand the ground war in Lebanon.

The agreement calls for the deployment of 30,000 Lebanese and U.N. troops along the Israel-Lebanon border. It falls short of some of Israel’s demands, including a strong mandate for the U.N. forces to take on Hezbollah guerrillas.

However, the draft is the best chance yet for peace after more than four weeks of war that has killed more than 800 people, destroyed Lebanon’s infrastructure and inflamed tensions across the Middle East.

Neither the Lebanese government nor Hezbollah has said publicly whether they would sign on to the deal, but it was widely assumed that they did not object to it. Plans to take the resolution to a vote were announced in New York shortly after U.S. Mideast envoy, Assistant Secretary of State David Welch, met for a second time Friday with Lebanese Prime Minister Fuad Saniora.

Israeli officials said Israel would not halt fighting until Israel’s Cabinet has approved the cease-fire deal in its weekly meeting Sunday. It was not immediately clear whether the military would expand its ground offensive in the time remaining, or would only hold existing positions.

Only six hours passed from an initial decision by Olmert to broaden the ground offensive to his acceptance of the cease-fire deal. The zigzag reflected Israel’s dilemma after a month of inconclusive fighting.

Israel has been unable to defeat Hezbollah and was concerned about growing Israeli casualties, as well as international condemnation, if the war continued. However, Olmert also feared that accepting a deal that does not rein in the guerrillas could lead to another war down the road and hurt him politically.

Olmert’s initial order to send troops deeper into Hezbollah territory came even as U.N. Security Council negotiations reached the final stretch in New York.

Several hours later, France and the United States reached agreement on a final draft, to be put to a vote later Friday. The draft would authorize the deployment of 15,000 U.N. peacekeepers in south Lebanon, along with 15,000 Lebanese troops, into the region “as Israel withdraws.”

The Security Council, repeatedly accused of taking too long to come up with a response to fighting, would leave out several key demands from both Israel and Lebanon in efforts to come up with a workable arrangement.

“You never get a deal like this with everybody getting everything that they want,” Britain’s Foreign Secretary Margaret Beckett said. “The question is, has everybody got enough for this to stick and for it to be enforceable? Nobody wants to go back to where we were before this last episode started.”

Despite Lebanese objections, Israel will be allowed to continue defensive operations, and a dispute over the Chebaa Farms area along the Syria-Lebanon-Israel border will be left for later. Israel won’t get its wish for an entirely new multinational force separate from the U.N. peacekeepers that have been stationed in south Lebanon since 1978.

There is also no call for the release of Lebanese prisoners held by Israel or a demand for the immediate withdrawal of Israeli troops. Although the draft resolution emphasizes the need for the “unconditional release” of the two Israeli soldiers whose July 12 capture by Hezbollah sparked the conflict, that call is not included in the list of steps required for a lasting cease-fire.

The ongoing fighting has killed more than 800 people – including at least 732 Lebanese and 122 Israelis.

After nightfall, there were some signs of troop movement on the Israel-Lebanon border. Battle-ready soldiers carrying heavy backpacks marched near the border as tanks assembled nearby. In south Lebanon, there were no reports of increased troop activity. Israeli officials gave conflicting assessments on whether a wider campaign was under way.

More than 10,000 Israeli troops are already fighting Hezbollah guerrillas in south Lebanon. In the new phase, Israeli forces would push toward Lebanon’s Litani River, some 18 miles from the Israel-Lebanon border, attempting to capture more than twice as much territory as they hold now.

Olmert has faced growing criticism at home for the army’s inability to halt the rocket barrages; Hezbollah has fired more than 3,500 rockets in the monthlong war. Polls also indicated that his initially approval rating, high at the start of the war, was slipping.

Commentators have suggested Olmert’s political career was at stake, and that he might even be forced to step down. Many Israelis believe defeating Hezbollah is essential for their country’s long-term security.

In Lebanon, Israeli airstrikes pounded south Beirut and border crossings to Syria, killing at least 15 people as ground fighting picked up intensity in the south of the country.

In the Bekaa Valley, an Israeli drone fired missiles into a convoy of refugees fleeing attacks in the southern town of Marjayoun, killing at least six people and wounding 16 others, an Associated Press photographer said.

The Israeli military said it had no knowledge of the incident. The army noted that it had imposed a travel ban on south Lebanon, and had received no request to coordinate a convoy in that area.

Throughout the day, civilians had been fleeing fighting in the Christian town of Marjayoun in long convoys after Israeli forces entered earlier this week.

Lutfallah Daher, the photographer, was with the convoy when it was hit near the town of Chtaura, about 30 miles north of the Litani River. Israel had warned it would attack any vehicle on roads south of the Litani, assuming it was carrying Hezbollah weapons or fighters.

Daher said the convoy consisted of more than 600 civilian vehicles and others carrying a detachment of 350 Lebanese soldiers and police when it left the area around Marjayoun. He said very few of the vehicles had left the convoy when it was hit.