BEIT HANUN - On Tuesday morning, Martyrs' Square in the center of town here was practically deserted. A small group of children sat at the foot of the minaret of the Nasser Mosque, the only remnant of the 250-year-old structure, whose walls were razed by Israel Defense Forces bulldozers. A few young women who work for a Palestinian organization that helps residents who suffered mental trauma during the intifada played with the children in front of television cameras from Al Jazeera's English network.

The streets, which used to be filled with pedestrians, looked ruined and abandoned. Also noticeably absent from the alleyways were the armed men. On almost every visit to Beit Hanun over the past months, you would see them roving about in groups: Hamas people, members of the Popular Resistance Committees (PRC) and others. It's not clear what made them scarce all of a sudden in this town: Perhaps it was the massive IDF strike against the armed militants, or maybe it was shame over their part in the military escalation that sent them into hiding from the furious residents.

Some in Beit Hanun were saying that after the shelling last week of the Al- Atamna family and the extensive killings of civilians, some prominent local families had expressly threatened members of the Qassam cells. In one instance, they say, an armed man identified with Fatah put a gun to the head of a Hamas activist who was busy laying cables to launch a Qassam rocket. The message was clear; the would-be launcher ran away.

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On Wednesday morning, the regular electricity supply was restored to Gaza after months of repairs of damage caused by the IDF shelling of the power station following the abduction of Gilad Shalit. That same morning, with what might be seen as provocative timing, activists from the military wing of Hamas returned to Martyrs' Square. They launched a volley of Qassam rockets toward Sderot and then fled. The volley killed Faina Slutzker, a 57-year-old Sderot resident, and seriously wounded 24-year-old Maor Peretz, a bodyguard of Defense Minister Amir Peretz.

The rocket launchers remained in the area, waiting for one of the youths who, in return for a small sum of money and at risk of being injured in an IDF strike, would come to collect them. This time, even the teenagers and younger children didn't want to take the risk. The heavy rocket fire aimed at Israel, right on the day before the planned arrival of PA Chairman Mahmoud Abbas (Abu Mazen) in Gaza to put the finishing touches on the formation of a unity government, smelled like another attempt by the Hamas military wing - which takes orders from Damascus - to torpedo the establishment of the "government of experts." Yet several Hamas leaders in the Gaza Strip declared that regardless of the government negotiations, firing rockets at Israel was a legitimate response to IDF actions, no matter what the cost.

Someone to talk to

Ismail Radwan, the Hamas spokesman in Gaza, looks irritated when asked what benefit the Palestinians derive from the firing of the Qassam rockets.

"You're only giving Israel excuses to operate in the Gaza Strip again," I say.

"Do you need excuses?" he asks. "So many times you've killed innocents without rockets or any other reason.

"Still, it must be obvious to you that your ability to strike at the Israeli side is limited in comparison to the IDF's ability to occupy Beit Hanun and do whatever it likes there."

Evidently, Radwan is not hearing this argument for the first time, and immediately fires back in reply: "We're using what we can to confront the occupation. We're creating a balance of fear. We know that the means at our disposal are more limited, but we've managed to create fear and anxiety on your side."

Radwan prefers not to comment on the fear that is created on the Palestinian side after a Qassam strike on Israel, in anticipation of an Israeli response. During the conversation, he repeatedly uses phrases like "the Zionist entity" and "the Zionist government," among others. "Is it hard for you to utter the name Israel?" I ask.

The question provokes smiles from some of his colleagues in the room. "You don't like being called Zionists? Look, you're a state of oppression. Your state will disappear from here, and as we see it, all forms of resistance - rockets, suicide bombings - are legitimate to remove the occupation of historic Palestine [the territories of 1948 - A.I.]. The military wing will choose whatever means it sees fit to use at any particular moment."

"Come on, let's be realistic for a minute," I urge, still waiting to hear Radwan assume a more rational tone and explain that these are just declarations for the sake of the media and that, in fact, he knows Hamas is not going to get rid of Israel. "You know you won't be able to wipe out Israel. So, leaving aside your ideological slogans, what is your realistic solution?"

The answer given by Radwan and the others in the room is still surprising even if you've heard it 100 times before: "You think that the realistic solution is that we be expelled from our land, from the home that was ours? The blood of the Dir Yassin massacre is still warm. The only solution is that we return to our homes within the 1948 territory."

"So what you're saying is that in the meantime you prefer to live in these awful conditions, under occupation, rather than recognize Israel and make peace?" I ask.

Radwan smiles again, as if he knows a secret that Israel isn't in on. "I promise you, the occupation won't last long. We've seen this in history. States based on oppression have been taken apart. We won't consent to live under occupation. We'll continue to fight it until we return to the homes we were expelled from in the Palestine of 1948."

Radwan is not particularly extreme in Hamas. He is ready to talk with Israeli ("Zionist") journalists - something that his predecessors in the job (Sami Abu Zohri and Mushir al-Masri) were unwilling to do. But he is still a party to the ideological blindness with which Hamas has lately been stricken. A small group of senior officials in the organization is voicing other ideas, but it is being shunted to the margins of the internal Hamas discourse, either because Israel has arrested its members or because the Khaled Meshal faction has made sure to silence them. Even the people close to Prime Minister Ismail Haniyeh, the head of the "pragmatic" camp in Hamas, are only willing to talk about a cease-fire with Israel, but not about peace, since they too have absolute faith that within a few years, Israel will cease to exist.

On the Palestinian political scene as well, Radwan refuses to really accept what's going on around him. While due to its inability to function, Hamas is ready to forgo its existing government and to accept the establishment of a government of experts, the movement's spokesman insists on stressing the illustrious standing of Haniyeh and his ministers. "About a month ago," he says, "during Ramadan, there was a Hamas rally at the Yamouk soccer field, when 250,000 Palestinians came to hear Prime Minister Haniyeh. You see? And that's just one example of the movement's strength today."

Fatah people, on the other hand, are ready to swear that this rally in Yarmouk is what caused Meshal to send Haniyeh packing and form a government of experts instead. "Meshal realized from the pictures that were broadcast from the soccer field that Haniyeh had become much more popular than him - that he was turning into an independent leader with support from the street," says a senior Fatah official, who is a member of the negotiating team for the unity government. "Right after the rally in Yarmouk, we saw a change on their side in the discussions about the government of experts. Meshal would rather not have Hamas heading the government if it means he's going to have competition in the organization."

Heir apparent

Fatah officials paint a totally different picture of Hamas' standing in the Palestinian street. They say that Hamas is losing support daily, while their organization is growing stronger. They see last week as a dramatic turning point - in their favor - in the balance of powers. It began with the shelling of the Al-Atamna family's building in Beit Hanun. As soon as word of the tragedy was out, Hamas and Fatah began competing to sponsor the funeral, which was expected to be a massive event that would receive broad coverage in the media. The organizations offered the grieving relatives food and drink for visitors, coffins and assistance in arranging impressive ceremonies. In the end, Fatah "won the tender" and supplied the required services for the funeral. One thing they had going for them was that several members of the Al-Atamna family are members of the Palestinian Preventive Security Service and Palestinian General Intelligence, which are affiliated with Fatah.

The tens of thousands who turned out for the funeral, and the hundreds of thousands of viewers at home, saw the 19 caskets wrapped in yellow Fatah flags. Activists from the organization led the funeral procession and the loudspeakers blared speeches by Fatah speakers, while Hamas was absent from the event - apparently angry over having lost out in the competition. Five days later, a Fatah flag was still flying over the shelled building and posters of the Preventive Security Service were still hanging in the entrance. In the whole town, hardly any green Hamas flags were to be seen, and there was a sense that Fatah had taken over Beit Hanun.

Two days after the mass funeral, the PA held events marking the second anniversary of Yasser Arafat's death. Here there was no competition. Fatah took center stage in the proceedings and in the media coverage.

"Many people in the organization felt that the era of internal disputes and disorder was coming to an end," says Maher Maqdad, a Fatah spokesman in Gaza. "Tens of thousands of people attended the rallies in memory of Arafat in Gaza and Ramallah, much more than last year. After Beit Hanun, people were asking themselves: Where is this mighty 'resistance' of Hamas that is trampled by the Israeli army within minutes? But it's not just Beit Hanun, or the rally in memory of Abu Amar (Arafat). There have been a whole series of events in which Fatah came out strengthened and Hamas weakened. Hamas' readiness to go into a unity government will hurt them, too. They won't be able to portray themselves as 'heroes' versus the Fatah people whom they describe as 'traitors.' And if they don't agree to a unity government, the criticism against them will only grow. Within Fatah there's a feeling of unity and it's being accompanied by smart moves, and this will continue to strengthen the organization."

Maqdad is referring primarily to decisions made by the Fatah Revolutionary Council earlier this week. At its meetings, it was unanimously agreed that Abu Mazen would be appointed to the position of general commander of the organization - a title hitherto held only by Yasser Arafat. The objective: to bolster Abu Mazen's standing among the public while undermining the standing of Fatah chairman Farouk Kaddoumi, who sits in Tunis and has been working to undercut the PA chairman. A second decision made by the council was to appoint for Fatah, for the first time in its history, a supreme leadership for the West Bank and Gaza together, a united leadership for both regions to be determined by Abu Mazen.

This move is perceived as a major victory for the interim Fatah generation - people like Jibril Rajoub, Nabil Amr and others. But, above all, it is the victory of "the Phoenix," Mohammed Dahlan, who is emerging as the strongest person in Fatah these days. The memorial day for Arafat, with whom Dahlan differed so much, actually symbolized the fortification of Dahlan's standing in the organization. As soon as the ceremonies and speeches in the courtyard of the Muqata in Ramallah were completed, dozens of young Fatah activists from the West Bank surrounded Dahlan, and showered him with hugs and kisses. This was clearly an unusual event in Fatah: a figure from Gaza being embraced by West Bank residents. Beyond that, the adulation shown for Dahlan also, to a large degree, marked a historic moment in which Abu Mazen's successor in the Fatah leadership (as long as Marwan Barghouti remains in prison, at least) became quite clear.