"We are closer to an agreement than you think," Palestinian Prime Minister Ismail Haniyeh said yesterday in a speech broadcast from Gaza. The agreement at issue is the result of marathon negotiations that Hamas and Fatah conducted yesterday under the aegis of an Egyptian delegation. After six hours, the parties agreed to set up a national strategy committee to deal with three principal issues: conducting diplomatic negotiations with Israel, unifying the Fatah and Hamas security forces, and managing the money that will arrive from donor states once the international boycott on Hamas is lifted.

The real news in this decision is Hamas' willingness in principle to participate in this national committee - thereby granting Palestinian Authority Chairman Mahmoud Abbas tacit support for the conduct of negotiations with Israel, even if Hamas representatives will not themselves take part in such talks.

Hamas agreed in principle that if diplomatic negotiations do occur, the main issues - such as borders, the future of the settlements and the status of Jerusalem - will be submitted to a referendum. Its agreement on this issue may imply that Hamas also understands that some formula must be found for recognizing Israel - since without Israel, no negotiations can take place.

The Egyptians made it clear to the Hamas and Fatah representatives that Hamas' participation in the committee would not suffice if the organization did not also adopt one of two formulas that includes recognition of Israel: The Arab League resolution adopted in Beirut in March 2002, or the "prisoners' covenant," which was drafted by Hamas and Fatah prisoners in Israel. Both of these texts include the fundamental principles: a Palestinian state in the 1967 borders and some way of dealing with the right of return. On the latter, the language of the Beirut resolution is more flexible than that of the prisoners' covenant.

The Egyptians warned that unless Hamas adopts one of these two documents, they will not be able to persuade the donor states and the banks to release funds to the PA. Moreover, they said, Hamas' refusal would give Prime Minister Ehud Olmert license to continue with his convergence plan.

Abbas indicated yesterday that he preferred the prisoners' covenant, though he gave it his own interpretation with regard to the refugee problem. Hamas sources said that Haniyeh "has not yet decided on the final formulation that he will agree to accept; this will be discussed by the parties next week, after he consults with Hamas' leadership abroad."

However, the sources also made it clear that these consultations are merely advisory, and that Haniyeh is authorized to make the decision himself. That is also why the gap between Haniyeh's and Abbas' speeches boiled down to three words: "the 1967 borders." While Haniyeh expressed his desire for an independent Palestinian state with Jerusalem as its capital, Abbas repeated the familiar formulation of "a Palestinian state in the 1967 borders with Jerusalem as its capital."

The prevailing view in Hamas is that by next week, the prisoners' document will have been accepted as the basis for the agreement that will be signed between Hamas and Fatah. This assessment rests on the assumption that Israel will not do its part in any case, and will not allow negotiations to supersede the unilateral convergence plan.