Gaza crisis complicates U.S. peace efforts

By Sue Pleming - Analysis

WASHINGTON (Reuters) - The Gaza border breach has undermined the Bush administration's strategy of isolating Hamas and experts say such crises dim U.S. chances of getting an Israeli-Palestinian peace treaty by the end of the year.

"Hamas not only blew a hole in the wall but they also blew a hole in the whole policy of continued isolation of Hamas," said Bruce Riedel, a former CIA analyst now with the Saban Center at the Brookings Institution.

Islamist militants blasted a hole in the border between the Hamas-run Gaza Strip and Egypt last week, allowing hundreds of thousands of Gazans through the gap to buy food and other goods unavailable due to an Israeli blockade.

Israel imposed the blockade after Palestinians fired hundreds of home-made rockets at Israeli border towns in the first half of January. Israeli officials say the number of attacks has now gone down but they fear Hamas used the opportunity to smuggle weapons and explosives back into Gaza.

Analysts say the frontier breach probably boosted the popularity of Hamas among Palestinians, both in Gaza and the Israeli-occupied West Bank.

That was the exact opposite of what Washington wants as it tries to strengthen the more moderate Palestinian President Mahmoud Abbas whose Fatah party is in charge in the West Bank.

Gaza border crossings are a battleground in the power struggle between Hamas, which seized control of Gaza by force last June and refuses to negotiate with Israel, and Abbas who is taking part in talks with Israel launched by President George W. Bush last November in Annapolis.

"The general conclusion of the past few days is that Hamas forces are very much in control of Rafah," said former U.S. ambassador to Israel and Syria, Ed Djerejian.

He said the crisis had enabled Hamas to drive home the fact that they could not be shunned or ignored. The message from Hamas, he said, was, "You have got to deal with us."

The United States brands Hamas a terrorist group and spearheaded a Western embargo against it after the Islamist militants trounced Fatah in January 2006 elections.

"NO PERFECT OPTIONS"

Egypt was negotiating the border dispute on Wednesday with Hamas and Abbas, with Abbas pushing for his own forces to control the border along with European monitors.

A senior U.S. official conceded any arrangement would likely involve the Egyptians having to deal with Hamas because it runs Gaza.

"There are probably no good or perfect options," said the official, who spoke on condition he was not named as the issue is being negotiated.

But he said the border crisis would not shift the U.S. policy of isolating Hamas. Neither would it scupper peace moves between Abbas and Israeli Prime Minister Ehud Olmert.