The Bush administration is once again in the process of committing a major policy blunder in the Middle East, one that is liable to have disastrous consequences and is not receiving the attention it should. This time it concerns the Israeli–Palestinian relationship. The Bush administration is actively supporting the Israeli government in its refusal to recognize a Palestinian unity government that includes Hamas, which the US State Department considers a terrorist organization. This precludes any progress toward a peace settlement at a time when progress on the Palestinian problem could help avert a conflagration in the greater Middle East.

The United States and Israel seek to deal only with the president of the Palestinian Authority, Mahmoud Abbas, in the hope that new elections would deny Hamas the majority it now has in the Palestinian Legislative Council. This is a hopeless strategy because Hamas has said it would boycott early elections, and even if their outcome would result in Hamas’s exclusion from the government, no peace agreement would hold without Hamas’s support.

In the meantime Saudi Arabia is pursuing a different path. In a February summit in Mecca between Mahmoud Abbas and Hamas leader Khaled Mashaal, the Saudi government worked out an agreement between Hamas and Fatah, which have been clashing violently, to form a national unity government. According to the Mecca accord, Hamas has agreed “to respect international resolutions and the agreements [with Israel] signed by the Palestinian Liberation Organization,” including the Oslo Accords. According to press reports on March 15, the new government, like the present one, will be headed by Ismail Haniya, the Hamas prime minister, but Hamas will get nine of the government’s twenty-four ministries, as well as an additional minister without portfolio; President Abbas and his Fatah party will control six ministries, and independent representatives—some said to be under the control of Hamas or Fatah—and other political factions will fill the nine remaining ministries.

The Saudi government views this accord as the prelude to the offer of a peace settlement with Israel, along the lines of the 2002 Arab Peace Initiative, a settlement to be guaranteed by Saudi Arabia and other Arab countries, based on the 1967 borders and full recognition of Israel. The offer was meant to be elaborated by Saudi King Abdullah at the Arab League meeting to be hosted by Saudi Arabia at the end of March. But no progress is possible as long as the Bush administration and the Ehud Olmert government persist in their current position of refusing to recognize a unity government that includes Hamas. The recent meeting between Condoleezza Rice, Abbas, and Olmert turned into an empty formality.

Many of the causes of the current impasse go back to Israeli Prime Minister Ariel Sharon’s decision to withdraw from the Gaza Strip unilaterally, without negotiating with the then-Fatah-controlled Palestinian Authority. This strengthened the position of Hamas. In the run-up to the January 2006 Palestinian legislative elections, Sharon refused to lift a finger to help Fatah’s prospects. At the behest of…