The physical and mental walls that we have erected between ourselves and the Palestinians enable us to focus, until November 6, on the "bomb or bombing" dilemma. Immediately thereafter our attention will turn to the local elections, which will be pushed forward. The main issue in the Israeli election - so hope members of the Labor Party - will be the state's social policy. But the developments in recent months on the other side of the separation fence illustrate once again the accuracy of John Lennon's, "Life is what happens to you while you're busy making other plans."

In recent weeks we have witnessed the practical consequences Egyptian President Mohammed Morsi's conduct will have on the future of the Palestinian "partner." Although the Non-Aligned Movement's summit in Tehran reaffirmed the PLO's status as the representative of the Palestinian people, Morsi refused to give his support to that organization. Instead, his government is strengthening its relations with Hamas, while downgrading its coordination with Palestinian Authority President Mahmoud Abbas to a minimum. It is only a matter of time until other states join Qatar, Turkey and Saudi Arabia, which have already effectively recognized the Hamas government and invest in it, both politically and economically. So do international institutions, headed by U.N. agencies, which are upgrading their levels of cooperation and coordination with the Hamas regime.

As far as the Palestinian public is concerned, Abbas' plan to appeal to the U.N. General Assembly later this month to recognize Palestinian statehood is a case of too little, too late. Every day the Palestinians hear Israelis pronouncing the death of the "two state solution," and watch as settler leaders, with the support of the Israeli government, do all they can to make that declaration a reality.

The backwind that Hamas enjoys is not limited to the diplomatic realm. Despite the massive damage done to the smuggling tunnels and Egypt's threats on the future of the Rafah crossing, Gaza's economic situation continues to improve, and Hamas' tax revenues from the tunnels keep rising. Due to Abbas' wish to keep officials loyal to Ramallah, Gaza still receives 48 percent of the Palestinian Authority's budget, despite contributing only 4 percent to it.

The recent wave of social protest in the West Bank, sparked by the rise in prices and directed primarily against Prime Minister Salam Fayyad, is escalating. The police force, which is officially under Fayyad's control, has also joined the protesters, as did the unions controlled by Fatah. Abbas and Fayyad are losing their political, economical and, in a certain sense, moral ability to confront these developments, which may destroy them politically.

The quiet in the West Bank, which is the result of the security coordination with Israel and of Abbas' policies (among other factors ), can dissolve in an instant, generating a state of anarchy from which Hamas alone stands to gain.

Perhaps then Shelly Yacimovich and Yair Lapid will finally understand Prof. Manuel Trachtenberg - head of the government-appointed panel that came up with proposals for addressing the socioeconomic distress - who said there can be no significant change in the areas of housing, education and health without confronting the Palestinian issue. Perhaps then Prime Minister Netanyahu will listen to Bank of Israel Governor Stanley Fischer who stated that the continuing Israeli-Palestinian conflict prevents the Israeli economy from growing at an annual rate of 5-6 percent.

And perhaps then the public will finally start asking why Israel has been spending 7-8 percent of its gross national product on defense in recent years, thus placing it "ahead" of 190 other states. Only Saudi Arabia, the United Arab Emirates and Qatar, whose GDP per capita is five times larger than Israel's, spend more. In 2007, the Brodet Committee on defense spending gave us part of the answer when it recommended an increase in the defense budget of NIS 100 billion over a period of ten years, stating that the "conflict with the Palestinians has become more 'expensive.'"