Bad Days, Uncertain Prospects: What Now on the Israeli-Palestinian Arena? By Yonatan Touval June 2007 Introduction These are bad days for the Palestinians. Hamas has taken over the Gaza Strip, Palestinian Authority President Mahmoud Abbas has dismissed the national unity government and declared a state of emergency, and a new government has been sworn in under Salam Fayyad in Ramallah. The world has immediately embraced Abbas and the newly established government in the West Bank, but Gaza will face a humanitarian disaster if ignored and the political ramifications of a split inside the Palestinian body politic are unclear. For its part, Israel, too, has undergone a political crisis recently, albeit not as radical as the one that is affecting the Palestinian Authority. The harsh indictment of Prime Minister Ehud Olmert by the partial report of the Winograd Commission, which was published on 30 April, has critically weakened the prime minister, and the prospects of early elections loom large. True, the victory of former prime minister Ehud Barak in the Labor Party primaries last week(12 June), and his subsequent appointment as defense minister instead of Amir Peretz, are giving Olmert a grace period of several months. But the final report of the Winograd Commission is schedule to be published sometime later this year, and many observers are predicting that it will include explicit recommendation for Olmert to step down. Will Olmert do so, and what will be the political ramifications of that? And what will Olmert he, indeed what can Olmert do, in the time being?