When Palestinian Authority President Mahmoud Abbas (Abu Mazen) announced earlier this week that he was suspending the peace negotiations, most Israelis responded with indifference. With guns firing in Gaza and rockets landing in Sderot and Ashkelon, of what relevance are the talks with the PLO?

I would argue that the peace negotiations, if reconceived, could provide the solution to the Gaza situation. Consider this: Suppose Israel does, in the next few months, reach a comprehensive final- status agreement with the PLO, with the understanding that its implementation will be performance-based and will likely occur over several years. How would Gaza and Hamas fit into such a framework?

First off, as specified in the Oslo Accords, Gaza and the West Bank would be treated as a "single territorial unit." Thus, the de jure sovereignty of the future state of Palestine over Gaza would be recognized in the treaty.

Second, because Israel has no settlers and no military installations in Gaza, performance-based implementation there could, in principle, proceed much more rapidly than in the West Bank. The key step that Israel would be taking would be lifting the air and sea blockade of the Strip, and giving the green light to Egypt to establish a normal international border between Egypt and the state of Palestine.

The performance-based quid pro quo that Israel would demand before taking such steps would be:

W an end to any attacks on Israel from Gaza;

W the transfer of governmental power and weaponry in Gaza from Hamas and other groups to the new government of Palestine;

W the implementation of effective mechanisms to ensure that Gaza complies with non-militarization clauses of the peace treaty, including monitoring of the flow of weapons.

Are there any circumstances in which Hamas would agree to such provisions, in exchange for the lifting of the air and sea embargo of Gaza, in the context of independence?

The key issue is whether Hamas would be given the opportunity to participate in governing the state of Palestine. And it is with respect to this issue that the peace negotiations need to be reconceived.

It should be recalled that in the Mecca accord of February 2007, in which Fatah and Hamas agreed to establish a unity government, Hamas agreed that the PLO has the authority to negotiate for the Palestinian people, provided that any negotiated treaty is ratified, either by a referendum of the Palestinian people, or by a reformed PLO that would include Hamas. Israel should have embraced this framework, because it offered a procedural path to a peace agreement that would have the potential to bind those who opposed its substance on ideological grounds. Instead, the Olmert government continued to spurn negotiations with the PLO.

It was only after the coup in Gaza, when the unity government fell apart, and when Hamas pronounced that Abbas had forfeited his mandate to negotiate for the Palestinian people, that the Olmert government embraced Abbas as a negotiating partner. It did this not because Abbas suddenly had an enhanced ability to bind the Palestinians. Indeed he had less authority. Rather, he and negotiations were embraced as part of an Israeli-American strategy to dislodge Hamas from power.

The Mecca formula, which was earlier expressed in the National Reconciliation Document of the Palestinian prisoners, can be revived, even outside a unity government. The key to that, however, is for Hamas to have a genuine opportunity to compete for power within a democratic Palestinian state. But herein lies a problem. The efforts of the United States, Israel and Fatah to deny Hamas the fruits of its surprise victory in the 2006 parliamentary elections have created a credibility problem. Why should Hamas believe that it will be allowed to govern if it wins elections in the future? And if Hamas does not believe that, then why should it accept the authority of a new Palestinian state? In short, Hamas needs to be convinced that next time will be different from last time.

One way to start is for President Abbas and Prime Minister Olmert to announce their agreement that the treaty under negotiation will take effect only if it is ratified by a Palestinian referendum, and to further specify that Israel will recognize any democratically elected government of the state of Palestine, provided only that such a government recognizes a referendum-ratified treaty as binding international law.

Going this route will give Hamas a stake in the negotiations. Not all in Hamas will respond positively to this, but it will be appealing to many. It offers a political transformation that can be a way out for all parties. Israel should take this risk. Reverse course on Hamas, de-escalate in Gaza, and focus on negotiations with the PLO. There is no better option.

Jerome M. Segal directs the Jerusalem Project at the University of Maryland's Center for International and Security Studies.