by Clara Marina O'Donnell

Many western diplomats and observers argue that the popular uprisings in North Africa and the Middle East reinforce the need for Israelis and Palestinians to return to peace talks. In May, US President Barack Obama and Israeli Prime Minister Benjamin Netanyahu are expected to lay out their views about how the process should be re-started. However, calls for an immediate resumption of negotiations are unrealistic. The political turmoil across the Arab world is making conditions on the ground – already dire – even less conducive to a lasting settlement. Instead, Europeans and Americans should exploit the hiatus created by current regional instability to encourage Palestinians to end their divisions and hold long-overdue elections before October. The EU and the US should also prod Israel to offer the prospect of serious peace talks to whoever wins those elections.

Western diplomats calling for progress in the peace process in response to the upheaval in the Arab world make two arguments. First they point out that Israel could end up with neighbours which are even more hostile to it. There is significant uncertainty about the makeup of the next leadership in Egypt – a key ally of Israel in recent decades. In addition, it cannot be ruled out that regimes in neighbouring countries, such as Syria and Jordan, will fall. In each of these countries, there are groups that are more hostile to Israel than the regimes which have governed in recent years. To limit the scope for conflict, some diplomats argue, Israel should solve its dispute with the Palestinians as soon as possible.

The second argument advanced by western diplomats is that if Israeli and Palestinian leaders do not make progress towards a final negotiated agreement soon, Palestinians in the West Bank might feel emboldened by the popular movements in other Arab countries – and start protesting against Israel or the local Palestinian authorities. In recent years, there have been relatively few protests within the West Bank, governed by moderate President Mahmoud Abbas, either against the Palestinian authorities or Israel. This is in stark contrast to Gaza, which since 2007 has been run by a more radical Palestinian faction, Hamas, and where many militant groups have been protesting violently against Israel, not least through rocket attacks. Some Gazans have already been inspired by the Arab spring, and held marches against Hamas' rule and calling for new elections.

While these arguments are valid, the upheaval across North Africa and the Middle East precludes a diplomatic breakthrough over the next few months. Even before the wave of popular uprisings, the realities on the ground in Israel and the Palestinian Territories stalled the successive diplomatic efforts of the Obama administration (and previously those of the Bush administration): since 2007, the US has been attempting to negotiate a peace deal between the Israeli government and President Abbas. At the same time, Washington, as well as the EU and Israel, have isolated the rulers of Gaza. But Abbas's credibility as a negotiator has been seriously undermined because he has not spoken on behalf of all the Palestinians. To make matters worse, recent Israeli governments have included political parties strongly opposed to negotiating certain key aspects of the peace process – including the withdrawal of illegal settlements in the West Bank or sharing Jerusalem.

The uprisings in Egypt and elsewhere in the region have thrown up two new obstacles: several Arab governments are shaky or in transition, which means they cannot commit to normalising their relations with Israel - a key component of a peace deal for any Israeli government. Second, Hamas is holding out hopes that regional power shifts – in particular the political rise of the Muslim Brotherhood in Egypt - will strengthen their position vis-à-vis President Abbas and his Fatah party. As a result, Hamas is now even less inclined to support peace efforts led by Abbas.

If the US initiates another push for immediate peace talks between Netanyahu and Abbas under current circumstances, they are most likely to flounder. Another diplomatic failure would fuel further disillusionment amongst the Palestinian population. It also risks strengthening calls from the political leadership in the West Bank to secure unilaterally the recognition of the state of Palestine at the UN – which would further complicate eventual peace talks and risk cementing divisions between Gaza and the West Bank.

Instead, over the next few months, the US, the EU and Israel should try to eliminate one of the key obstacles to peace – the lack of a united Palestinian government. Both Fatah and Hamas have repeatedly called for Palestinian reunification over the years, but their mutual antipathy has blighted several reconciliation efforts. However, Abbas has also been held back because Israel has stressed that if the Palestinian President were to form a government of national unity with Hamas, Israel would rule out peace talks. And the US and the EU have threatened to cut off their generous funding to the Palestinian Authority – although the EU has slightly relaxed its position in recent years.

The next deadline for the long-overdue Palestinian presidential and parliamentary elections is October 2011. The US and the EU should encourage Israel to make an offer to the Palestinians: if Palestinians hold elections in both the West Bank and Gaza before October, Israel will be open to peace talks with the resulting united Palestinian government, even if it contains members of Hamas – so long as they no longer resort to violence. In the meantime, Israel could demonstrate its good faith by improving conditions on the ground, notably by halting settlement building and removing further roadblocks in the West Bank.

There is a risk that reuniting the Palestinian factions would weaken President Abbas and Prime Minister Salam Fayyad – two figures who have shown a strong commitment to a peaceful resolution of the conflict and who have succeeded in improving the economy of the West Bank. But it is a risk worth taking, particularly because, according to polling by the Palestinian Center for Policy and Survey Research in March 2011, Abbas would win the presidential election and Fatah would receive 40 per cent of the vote in parliamentary elections (while Hamas would only secure 26 per cent). Even if Hamas were to fare better in the elections, having members of Hamas in a government of national unity would be better than leaving the group in continued isolation: over the nearly four years since Hamas has been in sole control of Gaza, Israeli border closures and military strikes (in response to the sustained rocket attacks) have led to poverty and alienation amongst the population of Gaza. And Hamas and other militant groups have built a significant military arsenal in preparation for another conflict with Israel – in large part with the help of Iran.

The Arab spring makes the continued boycott of Hamas even more problematic. The upheaval in Egypt is giving more room for manoeuvre to militant groups and outside actors - including Iran - within its Sinai region which borders Israel. Moreover, future governments in Egypt, Tunisia and possibly other countries in the region, may well contain Islamist groups. Having to deal with such groups is likely to make it harder for the EU and the US to continue sidelining Hamas.

If Israel, the US and the EU help to reunite the Palestinians over the next few months, they will limit the influence of nefarious groups in and around Gaza. They will incorporate Hamas into the political process at a time when the group has less popular support than moderate Palestinian factions. And importantly, Israelis and Palestinians will be putting themselves in a much stronger position to secure a lasting peace when the turmoil in their neighbourhood starts to settle.

Clara Marina O'Donnell is a research fellow at the Centre for European Reform