Hamas' violent takeover of the Gaza Strip last week has brought two separate Palestinian entities -- radicals in Gaza and moderates in the West Bank. That constitutes a major change in the Israeli-Palestinian equation.
It means those in charge in Gaza can no longer encourage terror attacks and blame them on others. It means Israel can sit down quietly with the West Bank moderates and discuss a better future for both sides.
But it also means that in Gaza, Israel has what critics of the 2005 disengagement predicted would fill the vacuum created by its withdrawal -- an Iranian-backed base on its doorstep.
The new situation, which no one quite knows how to handle, has generated a spate of creative thinking inside and outside Israeli government.
Soon after Gaza fell to the radicals, Olmert made it clear that he intends to evolve much different policies for dealing with the Hamas regime in Gaza and the more moderate Fatah government in the West Bank.
It is not simply a question of divide and rule. Olmert has argued that as long as Hamas was part of the Palestinian government, peacemaking was impossible. Now that there are effectively two separate authorities, he believes Israel can work with the moderates and ignore the radicals.
The new thinking raises a number of questions: Will Hamas sit back and allow Israel and Fatah to build a thriving West Bank as an alternative model for a Palestinian future? Will the moderates be able to hold onto power in the West Bank, or will Hamas topple them there, too? And with Hamas in control in Gaza, how far will Olmert be able to go in peacemaking efforts that once envisaged a Palestinian state in the West Bank and Gaza?
On Sunday, Palestinian President Mahmoud Abbas of Fatah reinforced the two-entity approach when he swore in a new emergency government in the West Bank without Hamas members. He described the Hamas takeover in Gaza as an "armed insurrection" and declared the Hamas government of Palestinian Authority Prime Minister Ismail Haniyeh illegal.
Abbas said the new government's first goal would be getting the international sanctions against the Palestinians lifted. The sanctions were imposed because of Hamas' participation in the government.
Olmert has made it clear already that Israel would be ready to release about $562 million in Palestinian tax money, since the danger of the funds falling into terrorists hands has mostly been eliminated. Moreover, Israel probably will want to cooperate with the international community in transforming the West Bank economically. The aim is to create new hope for the West Bank moderates through major investment and political dialogue.
As to Gaza, the government will regard it as an enemy entity, and enforce an economic and a military blockade while taking steps to prevent a humanitarian crisis.
Explaining the new approach to Gaza, Deputy Defense Minister Ephraim Sneh said the government anticipated humanitarian problems because "Gaza is controlled by reckless gangs who don't care about the civilian population." But he said Israel would be "attentive" to humanitarian requests from international agencies, would find ways to allow food and medicine to go through, and would not cut off water and electricity supplies to Gaza.
The challenge for Israel is to prevent a humanitarian crisis, for which it would be blamed, while fighting terror and preventing the continued influx of weaponry, especially across the Egyptian border.
One idea that's been broached: an international force to move in along the border. Hamas, however, said it would not allow foreign troops, and the odds are remote that potential participants would be prepared to take on the terrorists.
A second option would be to beef up Egypt's border presence, but that is unlikely to be any more effective than it has been so far.
Therefore, some analysts are saying, Israel eventually will have to move in and smash Hamas as a military force.
The new situation has Israelis on the left and the right proposing new solutions.
Likud opposition leader Benjamin Netanyahu, one of the most outspoken critics of the 2005 disengagement, suggests working with the international community to weaken Iran and its proxies.
"Israel will not be able to tolerate the existence and growth of an Iranian base on the outskirts of Tel Aviv and Beersheba," he said.
Others on the right have more radical proposals.
Maj-Gen. (Res.) Yaakov Amidror, a former head of intelligence analysis, argues that Israel will have to launch a major military operation to topple Hamas and then reoccupy Gaza to stop the radicals from coming to power again.
Israel Hasson of the hawkish Yisrael Beiteinu party recommends declaring Gaza an enemy state and letting it go on its own ? a proposal he made even before the Hamas takeover.
On the left, Carmi Gillon, a former Shin Bet Security Services chief, sees a short window of opportunity. Gillon says the West Bank poses a much more acute security problem for Israel than Gaza because it has a much longer border, proximity to major population centers and many Jewish settlers.
But he says with Hamas being much weaker in the West Bank than in Gaza, Israel should encourage Fatah to crush the terrorists in the West Bank and then pacify the area further by cutting a deal with the moderates. Gillon proposes creating conditions for positive dialogue by unfreezing tax money, releasing Fatah prisoners and lifting roadblocks
Maj-Gen (Res.) Doron Almog is among the few commentators to recommend talking to Hamas. Almog says Israel should discuss a long-term cease-fire with the radicals while taking steps to stop the influx of weapons.
Ironically, the Hamas takeover could help stabilize Israeli-Palestinian relations. In the case of attacks from Gaza, Israel could take much tougher action. And in the West Bank, there could be the beginnings of a modus vivendi.
Much will depend now on how all the main actors -- Israel, the United States, Iran, the moderate Arab states, Fatah and Hamas -- play their new hands.