Steven J. Rosen, Director of the Middle East Forum's Washington Project, is the former foreign-policy director of the American Israel Public Affairs Committee (AIPAC). Bringing three decades of foreign policy experience to his analysis of Middle Eastern

Steven J. Rosen, Director of the Middle East Forum's Washington Project, is the former foreign-policy director of the American Israel Public Affairs Committee (AIPAC). Bringing three decades of foreign policy experience to his analysis of Middle Eastern affairs in general, and Palestinian-Israeli relations in particular, Mr. Rosen briefed the Middle East Forum in a conference call on May 1, 2014.

The impasse in the Israeli-Palestinian peace negotiations has prompted a surprise policy change by the Palestinian Authority (PA) in the form of a unity agreement with Hamas, which the U.S. government and European Union have designated a terrorist organization.

Though this move rehearses prior failed agreements between the two parties, the idea of the two organizations reconciling and unifying enjoys widespread Palestinian support. Washington and Jerusalem could support this move if Hamas met the Quartet's three conditions of recognizing Israel, renouncing violence, and observing past agreements. Yet Hamas has not done so and instead remains on American and European lists of terrorist organizations. As such, it is legally banned from receiving financial aid.

Policies, however, are more flexible than laws and the interim Hamas-Fatah union, to be formed while new elections are in the works, may evade a funding ban by not including Hamas members. Indeed, some Palestinians have suggested that Hamas be absolved from endorsing the Quartet's conditions by virtue of its association with the PLO, which has accepted those terms. Ron Dermer, Israel's ambassador to Washington, dismissed this ploy out of hand but some Europeans may find it attractive, not least because member states may interpret as they wish declarative EU policies not unanimously adopted by the European Council.

The PA's Mahmoud Abbas has probably calculated that reconciliation with Hamas places him in a stronger position to pressure Israel, but it entails some weighty problems that may again cause its collapse. For example, how will the union enforce its will so long as Hamas's militia remains separate and intact? How will the PA's budget be affected by Hamas's financial problems following the Egyptian government's destruction of most of its smuggling routes?

Washington should stand firm by the principle of never funding a terrorist organization, which Hamas most certainly is, nor recognizing or funding a PA that joins with and enables a terrorist organization.

Summary account by Marilyn Stern, Associate Fellow with the Middle East Forum