Newly elected Israeli Prime Minister Ehud Olmert is scheduled to visit the White House May 23 for talks with President Bush. The visit comes at a time when the Hamas-led Palestinian government faces a deepening financial crisis.
In the past six months there have been dramatic changes in Palestinian politics, severely complicating efforts to reinvigorate the Middle East peace process.
Palestinian elections in January brought victory to Hamas, a group the United States, Israel, and the European Union say is a terrorist organization.
In March, Israel's new Kadima Party won the most seats in parliamentary elections, and Ehud Olmert became prime minister after Ariel Sharon suffered a massive stroke.
The success of Hamas at the polls led to the cutoff of direct assistance from the United States and other countries to the Palestinian government.
This created a financial crisis within the Hamas-led administration because it has run out of money to pay its 165-thousand employees.
Palestinian parliament member Ziad Abu-Amr says this could lead to a disaster in the West Bank and Gaza Strip. "The Palestinian Authority and the Palestinian order as a whole may be on the verge of a virtual collapse. I think unless something is done real fast this eventuality may materialize anytime. The situation is rather precarious," he said.
The United States, the European Union, Russia and the United Nations, a group of Middle East mediators called the "Quartet", have agreed to find a way to finance humanitarian programs in the Palestinian Territories.
Israel has also indicated a willingness to release some of the Palestinian tax revenue it collects that has been frozen since Hamas came to power.
But Abu-Amr says the cutoff of direct aid has increased hostility toward donor countries. "I think the United States of America and the European Union and the international community will do better if they find different rules of engaging the Palestinians other than this collective punishment and siege and boycott, which is construed and understood by the Palestinians as a means of humiliating the Palestinians, subjugating the Palestinians," he said.
The new Israeli Prime Minister Ehud Olmert says he is willing to negotiate with the Palestinians, but has expressed doubts that Hamas will be a partner in peace.
In the coming talks at the White House, Mr. Olmert is expected to outline a plan for unilateral separation, which calls for Israel to withdraw troops and Jewish settlers from large parts of the West Bank, while annexing major settlement blocks. Israel withdrew from the Gaza Strip last year.
Palestinians have condemned the proposal, saying it amounts to a massive land grab that violates international law.
Zalman Shoval, who served twice as the Israeli ambassador to the United States, says many people in his country have come to the conclusion that such independent action is the only way to move forward. "If before there had not been too much confidence in talks with the Palestinians anyway, after the Hamas victory there is almost a consensus in Israel that there is no one to talk to. Therefore, unilateral steps of one sort or another are the only practical option," he said.
With the Israelis preparing to act without an agreement with the Palestinians, and Hamas heading the Palestinian Authority, Middle East analysts see little chance for reviving the peace process.
"Never has there been a grimmer situation for the pursuit of real, meaningful and effective peacemaking," said Aaron David Miller, a Public Policy Scholar at the Woodrow Wilson Center, where he is writing a book about his 20-years at the State Department helping to formulate policy on the Middle East and the Arab-Israeli conflict.
"You have what I would describe to you as the four no's. There is no trust between Israelis and Palestinians. There is no effective and empowered contacts or negotiations between Israelis and Palestinians. There is no governing set of principles, mutually acceptable or accepted by Israelis and Palestinians that constrain or regulate their behavior. Finally, the fourth no, there is no third party willing and or able to play an effective and meaningful role in response to either crisis or opportunity," he said.
Mr. Olmert has insisted that no peace talks will take place with the Palestinians until Hamas agrees to recognize the Jewish state, something Hamas has refused to do.
During his visit to Washington Mr. Olmert is expected to seek both diplomatic and financial support for his plans to withdraw unilaterally from the West Bank.