How Will the Unity Government Affect International Boycott?

EU officials are unconvinced that the formation of a PA national unity government will result in ending the economic sanctions on the PA. However, it is unclear whether the three demands policy can remain intact.

A senior European diplomat said that “the Hamas-Fatah agreement to form a national unity government is not enough for the Europeans to begin channeling money back into the Palestinian Authority”. The Finnish EU President praised the formation of a national unity government in the PA as a positive step, but made no reference to the renewal of funding.

It appears that the international community is uncertain about the appropriate response to the estbalishment of a national unity government in the PA.

On the one hand, the "three demands policy" originally set out and advocated by Israel is holding steady at the political level. On the other, the EU and other international actors have found ways to formally bypass Hamas and transfer funds into the PA and its institutions, thus easing the pressure created by the political boycot.

The Reut Institute contends that if Israel insists on a stringent compliance with the three demands policy, it may face:

  • ongoing stagnation in the political process with the Palestinians and deterioration of the situation within the PA, the combination of which may lead to the collapse of the PA or a third intifada;
  • gradual erosion, whether formal or indirect, of the international coalition, and de-facto aid to and political contacts with Hamas representatives.

Therefore, in order to protect its interests following the estbalishment of a unity government in the PA, Israel may need to re-examine its current policy and possibly allow the resumption of the political process and/or the reconstruction of the PA.