Rice initially envisaged the Feb. 19 summit as a grand festive opening of three-way talks on the establishment of a Palestinian state. But the agreement between the radical Hamas and the more moderate Fatah to establish a Palestinian unity government that probably won't overtly recognize Israel altered the focus.
Rice and Olmert used the summit to make clear to Abbas that the United States and Israel will boycott the new Palestinian government unless it meets the international Quartet's three benchmark conditions: recognition of Israel, acceptance of previous Israeli-Palestinian agreements and renunciation of violence.
Still, the summit was not without its achievements: It clarified what the Palestinian side needs to do to get the yearlong international economic boycott lifted; it broached new ideas for advancing the peace "road map"; and it made clear that peace talks with Abbas, a Fatah leader who does accept the three benchmark conditions, would continue even if the new Palestinian government does not follow his lead.
What happens next will depend on how skillfully the parties maneuver in trying to advance their often disparate agendas. For example, how far they are able to move along the peace road will depend to a large extent on how the new power-sharing arrangements between Hamas and Fatah play out.
Will Fatah be able to use Hamas' support of the unity government to move the process forward, or will Hamas be able to exploit a Fatah fig leaf to have international sanctions lifted without making any political or ideological concessions? Will Abbas be able to move the talks toward the two-state final peace deal he wants, or will Hamas limit him to no more than the long-term cease-fire it seeks?
In cutting the national unity deal with Fatah in Mecca in early February, Hamas had two major priorities: ending weeks of dangerous internecine fighting with Fatah before it escalated into full-blown civil war and getting the international boycott on the Palestinians lifted.
For Hamas, the problem is how to get the boycott lifted without making ideological concessions -- like recognizing Israel. The solution has been to give Abbas a free hand to negotiate in the hope that progress will entail at least a gradual easing of the sanctions. But what will Hamas do if there is a diplomatic breakthrough, come on board or try to spoil it?
The classic Hamas strategy is based on the assumption that time is on the side of the Palestinians. Hamas leaders argue that the regional balance is tilting against Israel and that, over time, the Palestinians will prevail. Therefore, they oppose a two-state solution and seek a long-term cease-fire, or hudna, which they hope will lead to the lifting of the international boycott and enable their group to build up its power for another round against Israel.
Some Fatah spokesmen, however, detect a looming transformation in Hamas thinking. They argue that the Mecca agreement heralds a movement toward Abbas' position that violence against Israel is counterproductive and that Hamas might be ready, under certain circumstances, to consider the merits of a two-state solution. And, if that is the case, Abbas may be given license to go all the way.
In any event, Abbas hopes to use the negotiations to transform the everyday life of Palestinians and so restore Fatah's political dominance. His goal in the ongoing talks with Israel and the United States is to get a negotiation framework for a permanent Israeli-Palestinian peace deal in place so he can offer the Palestinian people a "political horizon." He also wants Palestinian prisoners released and Israeli army roadblocks in the West Bank lifted.
In Monday's summit, Abbas reiterated the importance of these gestures in the struggle for Palestinian opinion and, in return, promised that the new Palestinian government would do all it could to release the abducted Israeli soldier Cpl. Gilad Shalit and stop Kassam rockets being fired over the Gaza border.
By improving his image among the Palestinian people, Abbas hopes he and Fatah will be able to win new elections. When they come, he wants to be able to say that Fatah can deliver on statehood and large-scale foreign investment, whereas Hamas can only offer more suffering.
In this situation, the American game has been to adopt a carrot-and-stick policy to convince the Palestinians to move on the two-state track. To encourage the Palestinian side during the summit, Rice suggested discussing all aspects of the road map simultaneously, including statehood, but implementing the stages sequentially -- from cease-fire to Palestinian mini-state to full-fledged Palestinian statehood.
"The road map does not say that it is not possible to talk about the destination even if you have many, many conditions on both sides that need to be fulfilled before you can get there," Rice told the daily Ha'aretz.
But in an implied criticism of the Palestinians' lack of readiness for serious engagement, Rice told the Palestinian daily al-Hayam that she was not sure there could be a Palestinian state before President Bush's presidency ends in January 2009.
Israel's approach has been to use international support for the three benchmark conditions to pressure the Palestinians to accept them. But even if they do not, as is widely expected, Olmert remains interested in a political process to revive his flagging political fortunes.
Olmert is skeptical about the chances of resolving final-status issues like Jerusalem or refugees. Indeed, he maintains that discussing them prematurely could do more harm than good. So, ironically, like Hamas, the Israeli prime minister also prefers a long-term cease-fire without the trappings of Palestinian statehood. Given the newfound unity on the Palestinian side, this might just be doable. Until now Abbas, despite his good will, has been largely impotent, unable to deliver on a cease-fire or on Shalit's release, never mind Palestinian statehood or final borders.
The new Hamas-Fatah unity government, however, represents a very wide segment of Palestinian opinion and would have the moral authority to sanction compromises with Israel. Indeed, with its backing, Abbas might be able to make a deal that sticks. Especially if, like a long-term hudna, it is one Hamas backs anyway.
Leslie Susser is the diplomatic correspondent for the Jerusalem Report.