One day in 1994, when I was involved in a European Union media programme that brought Arab, Israeli and EU journalists and filmmakers together through co-productions and training, I was taken by Ahmed, one of our radio trainees, to lunch with his family in Gaza City's Shati refugee camp.
I met his father, an old man, shrouded in a white bernous and sleeping on the clay ledge of an alley. "He was once a rich farmer in Ashkelon [in Israel]," said Ahmed, "but we had to flee in 1952 and my father has lost all hope, all dignity, since then."

Yet 13 years ago, Palestinians were about to have their independence. They had suddenly stopped talking about the Israeli occupation and showed little enthusiasm for Hamas, then a small group, let alone terrorism. They talked about business, education, health and domestic issues. They grumbled about the new Palestinian Authority (PA), created out of Yasser Arafat's Palestine Liberation Organisation (PLO), as if it was already their sovereign government.

The port from which they might export their fruit and vegetables (rather than let them  linger and rot in Israeli customs) and the new airport being built would open them to the world for the first time since Israel occupied Gaza in 1967, they told me. The Japanese were considering a car plant in Gaza. They could not have foreseen that a decade later they would be effectively imprisoned in Gaza, with little hope of any change.

Back then, there were Israelis too who believed that good would come from Gaza, that Israel's salvation lay in creating an economically viable and culturally vibrant, sovereign Palestinian state in the West Bank and Gaza, the remaining 22 per cent of the former British mandate of Palestine after Israel had been formed in 1948. And it seemed to me that Israel would become the economic superpower in the Near East and groups in the region rejecting Israel's right to exist would have nothing more to feed on.

Then in January 2006, Hamas was elected to power in the Palestinian Territories. The organisation enjoys a reputation for financial probity and welfare provision among Palestinians. But its 1988 Charter calls for the nullification of Israel by Islam and claims that "the land of Palestine is an Islamic waqf [a gift of property] endowed to all Muslim generations until the day of resurrection". Apart from its acts of violence it has won notoriety in the West by subscribing in its charter to concepts contained in the fraudulent, anti-Semitic book, The Protocols of the Elders of Zion. "For the Zionist scheme has no limits," says the Charter. "And after Palestine it will strive to expand from the Nile to the Euphrates." It also claims that "the Islamic Resistance Movement [Hamas] is a humanistic movement. It cares about human rights and is committed to Islam's tolerance of the followers of other religions."

After the election result, the United States and Britain took the lead in applying sanctions against Hamas until they renounced terrorism and recognised Israel's right to exist. After coming to power Hamas declared a hudna or truce with Israel, postponed the issue of recognition until the next generation, and agreed to abide by agreements signed by the PA, such as United Nations Security Council resolutions 242 and 338, which themselves recognised Israel. The Mecca agreement of this February brokering a national unity government between Fatah and Hamas also implicitly recognised Israel in return for a withdrawal to the 1967 borders.

Meanwhile, the anger of the Palestinians has grown, making Gaza a powder keg. Huge Jewish settlements, connected by settlers-only roads, have appeared on the hilltops of the still- occupied parts of the West Bank. Palestinians say they are constantly held up and bullied at checkpoints. The wall, which Israel says is intended to keep out suicide bombers, has absorbed the aquifers and at least 10 per cent of the West Bank, and cut off Palestinian farmers off from their farms. Jerusalem has become inaccessible while towns such as Bethlehem are encircled by the wall.

Disgruntlement with the Palestinian Authority, meant to last for five years from 1993 until the institutions of a sovereign state were functioning, has spread. Palestinians believe that it has achieved none of the liberties which the Oslo Accords had appeared to offer, and which the people expected.

Observers have predicted an explosion of the kind we have seen in Gaza. In May, in a leaked report, Alvaro de Soto, the UN's Middle East envoy, said that the international boycott of the Palestinians after Hamas had won the elections had "devastating consequences" for the Palestinian people, that Israel had adopted an "essentially rejectionist" stance towards them and that the Quartet of negotiators - the US, the EU, Russia and the UN - had become "a side-show". De Soto also quotes David Welch, the US envoy to the Middle East, as saying, a week before the Mecca agreement, "I like this violence" because "it means that other Palestinians are resisting Hamas".

The two-state solution to the Israel/Palestine conflict that has been the common concept since 1993 now seems as far away as ever. The one-state solution espoused by the late Edward Said, and by Ghada Karmi in her new book Married to Another Man, is an impossible dream at present. Hardliners have taken over Hamas and a Fatah-dominated West Bank and a Hamas-dominated Gaza will be a recipe for disaster.

Like Iraq these will be failed states, a playground for the harshest elements such as al-Qaida. Only by giving the Palestinians hope of genuine sovereignty and economic viability can the region avoid great danger. Israel has nuclear weapons and a meltdown of its neighbours - Syria, Lebanon and Jordan are now highly vulnerable - could lead to one of the world's great catastrophes.

Read Michael Hirst's article

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