Today, there is no Palestinian entity to which Israel can safely hand over the territories. Moreover, while the West Bank remains under occupation, Fatah will not engage in effective security cooperation. Were it to do so, it would be seen as ?the police of the occupation,? and its delegitimization would be terminal.

There is, however, a way to foster the emergence of a Palestinian partner. The key is to make security performance part of the process of ending the occupation, rather than a precondition for negotiations. Here is how:

1. Israel immediately opens negotiations on territorial and security issues with Palestinian leader Mahmoud Abbas, as head of the PLO. The negotiations include the future of both Gaza and the West Bank. Neither Jerusalem nor refugees are negotiated at this point. Except for Jerusalem, agreement would be sought on permanent borders (not interim borders as in the optional phase II of the "road map") and there would be mutual recognition by the two states. The agreement would be more than a hudna, but less than end-of-claims. In conducting negotiations, as president of all Palestinians, Abbas would consult with anyone he chose to, including Hamas leaders.

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2. Upon reaching agreement with Israel on permanent borders and security arrangements, Abbas submits the treaty to a referendum. He requests that Hamas permit such a referendum in Gaza as well, under the supervision of the Palestinian Elections Commission and international observers. Hamas has previously said it would respect a referendum on a PLO-negotiated agreement, but if it refuses, the referendum is held in the West Bank alone. Because the agreement does not deal with refugees, the referendum is not open to members of the Palestinian diaspora.

3. If approved in a referendum, the treaty is deemed by Israel and the PLO as "ratified," and performance-based implementation begins:

? Israel recognizes the State of Palestine as the de jure sovereign of Gaza and the agreed-upon West Bank and swapped territory. Israel immediately withdraws its military forces from that portion of the West Bank where Palestine is most able to function as a state (that is, where it can exercise a monopoly of force). This would include the Jericho area and the border with Jordan.

? Israel begins dismantling settlements in all areas under Palestinian de jure sovereignty. Both sides undertake confidence-building measures, including prisoner releases, improved freedom of movement, and an end to incitement.

? Concurrent with Israeli military withdrawal and the assumption of de facto sovereignty over the initial area, the State of Palestine is established, explicitly based on the 1988 Declaration of Independence. The PLO designates a broadly based interim government, pending future elections, including members of Hamas, but only if they accept the ratified treaty as the law of the land.

? Palestine seeks international recognition and admission to the United Nations.

? Once the State of Palestine is established, the Palestinian Authority is dissolved. The new state exercises sovereignty where Israel has withdrawn; where Israel has not yet withdrawn, it serves as the administrative authority; and it claims sovereignty over Gaza, where Hamas continues to hold actual power. Provided that there are no attacks on Israel from Gaza, Israel would treat Gaza with benign neglect.

? As the new state demonstrates its ability to function as a sovereign, Israel extends its withdrawal of forces. This demonstration of capacity to actually exercise sovereignty is the necessary precondition for further withdrawal. This means disbanding all non-state militias and disarming or integrating into the state forces all individuals presently bearing weapons. Essentially, the state would be calling on Palestinians to accept it as the sovereign. If cooperation is not forthcoming, it could use other methods. In order for this process to be credible to Palestinians, a third party (such as the United States or the Quartet) serves as the "court of appeal" should Israel and Palestine disagree over whether the state has sufficient control to trigger Israeli withdrawal.

? Once Israel has fully withdrawn from all of the agreed-upon West Bank areas, Palestine will seek Hamas' acceptance of its sovereignty over Gaza as well. If this is actually accomplished on the ground, Israel, in accord with the security provisions of the treaty, will lift the air, land and sea blockade of Gaza. Provided it accepts the treaty as binding, Hamas will be offered the opportunity to function as a political party, without any armed wing, and to participate in new elections. With Israel offering to lift the blockade of Gaza, it is likely that Hamas will accept these terms for re- establishing Palestinian unity, under the authority of the new state. If Hamas rejects this offer and retains military control of Gaza, the status quo would continue, awaiting evolution prompted by the Gazans themselves.

4. Negotiations over Jerusalem and refugees would be conducted on a state-to-state basis. They would begin immediately after the first elections in the State of Palestine, to be held shortly after Israel completes its withdrawal from the agreed-upon West Bank territory. Resolution of those issues would satisfy, in the Palestinian dimension, the requirements of the Arab Peace Initiative for normalization of relations of the Arab states with Israel, and for an end-of-claims agreement between Israelis and Palestinians.

Jerome M. Segal is director of the Peace Consultancy Project at the University of Maryland's Center for International and Security Studies