Q. Assuming it is boycotted by Israel and much of the international community, how will a Hamas-dominated Palestinian Authority get money to keep the Palestinian economy afloat?

A. This question embraces the dilemma facing Hamas ever since it won its unexpected victory on January 25, and in many ways explains why Hamas was unprepared to win. Because of the history and geopolitical nature of the Israeli-Palestinian conflict, Palestine has become dependent economically on Israel and on international donor aid. Hamas rejects this economic configuration, and in any event appears to be politically unwilling to make the concessions required to maintain it. Yet Hamas leaders proclaim that they will manage. They face the challenge of raising or saving about one billion dollars a year (half the annual Palestinian budget) to make up for the donor shortfall likely to be brought on by their policies. At this point, they appear to be exploring four parallel avenues.

First, they hope to persuade at least some of the traditional international donors to continue their aid, essentially without conditions. Switzerland and Sweden have mentioned aid efforts and Russia has talked of "urgent aid". But it is not yet clear whether, like the European Union, these countries are referring to the delivery of aid during the current interim period prior to the formation of a Hamas government, or following the formation of a government.

Second, Hamas has been assured of aid from sympathetic radical countries like Iran. The Organization of the Islamic Conference (OIC) is also reportedly considering an aid program, as is the Arab League. The latter has mentioned $50 million a month, roughly the equivalent of the taxes Israel collects and is withholding; actually, this sum corresponds with a long unfulfilled Arab League commitment to provide $600 million a year. Conceivably the League, in its summit scheduled to convene this month in Khartoum, will condition this aid on acceptance by Hamas of the March 2002 Beirut peace plan (the "Saudi plan") that calls for acceptance of Israel in return for comprehensive land for peace deals and settlement of the refugee problem based on United Nations General Assembly Resolution 191 from 1949. The real problems are that the Arab League, OIC and other third world donors have proven notoriously unreliable for the Palestinians in the past, while Israel will undoubtedly try to intercept bank transfers and couriers bringing cash from sources like Iran..

Third, Hamas leaders are turning to wealthy devout Muslims in the Gulf countries and elsewhere and asking for individual contributions. This reflects a well-established Islamic tradition of secret giving as well as Hamas' appeal, as the first elected Islamist government, to believers. The Muslim Brotherhood in Egypt, the spiritual and organizational parent of Hamas, has called upon individuals in the Islamic world to channel donations through the Arab League, the Red Crescent and other relief agencies. One leader of the Egyptian Brethren claimed that members were ready to contribute a quarter of their monthly earnings. This reflects the huge stake the Brotherhood has in the success of Hamas' governing enterprise in Palestine.

Fourth, Hamas is likely to be quite successful in reducing corruption inside Palestine and galvanizing self-sufficiency and self-help campaigns that will reduce the overall budget and, accordingly, the need for aid. Hamas, after all, calls for the severing of Palestinian-Israeli economic ties that include some $2 billion annually in imports from Israel, though to what extent goods purchased from Israel can be replaced by locally-made products is not at all clear. Hamas will also reduce salaries of senior officials and trim ministerial budgets. And it plans to abandon some of the civil society-building projects that donors like the United States have been funding directly.

Then, too, if Israel, the US, the EU and others do find ways to transfer monies for funding aid and development projects in Palestine by skirting Hamas and working directly with President Mahmoud Abbas or Palestinian NGOs, as they have declared they hope to do, this will have the effect of reducing at least some economic pressure on the Hamas government.

Khaled Mish'al, head of the Hamas Politburo based in Damascus, summed up the strategy succinctly in an interview last week with al-Hayat: "These monies--especially those that used to come from the US--focused on specific programs that the US used to choose. Hamas will replace these monies via Arab popular and official support. Moreover, Hamas is the Palestinian party best able to employ this money in an incorrupt manner, guaranteeing that the PA's budget will not get mixed up with the movement's own monies by providing every guarantee of honesty and transparency. Moreover, we must point out that certain international parties. . . will continue to back Palestinian projects even under the new government."

To what extent these diverse efforts will make up for an aid shortfall is at this point difficult to predict. The EU alone threatens to withhold some 500 million dollars in annual contributions. But Hamas' confidence that it will manage economically without caving in and making political concessions in violation of its Islamist principles should be taken seriously.

Q. What, then, are your best and worst case scenarios for Israeli-Palestinian relations in the coming year or two?

A. In the best case, Israel under a Kadima-Labor government will proceed with the dismantling of additional settlements in the West Bank. Israel will maintain military control over the evacuated areas in order to deny Hamas the claim of having liberated additional territory. Nevertheless, the momentum of dismantling additional settlements will encourage Hamas to maintain the ceasefire.

Hamas, in turn, will integrate independent and Fateh-affiliated actors into its coalition, and will merge its own armed forces with those of the PA. Though it will not make all the concessions demanded by Israel and the international community, some small degree of trust and basis for communication will nevertheless develop. Fateh will regroup, Abu Mazen will exercise some leadership, and their pressure, coupled with Hamas' need for both funds and a modicum of infrastructure coordination with Israel, will contribute to the emergence of a modest new modus vivendi. It will take more than a year or two to determine how far this might develop.

In the worst case, Hamas will encourage terrorist attacks and nourish its own terrorist infrastructure while expanding contacts with Syria and Iran. Israel will confront an expanding circle of armed Islamists, installed in democratic elections, on three fronts: Gaza, the West Bank and southern Lebanon. Iran will proceed with its military nuclear program, integrating the Arab Islamists in its sphere of influence. Unrest will grow in Jordan and Egypt, sparked by sympathy and support for Hamas. Israel will completely sever links between Gaza and the West Bank and will seek to cooperate with Egypt in isolating Gaza, while encouraging Fateh to recoup power in the West Bank. The Oslo and Paris agreements (the latter controls Israeli-Palestinian economic integration) will become defunct, de facto if not de jure. The likelihood of a broad military confrontation of some sort will increase, as will pressure to install an international peacekeeping force.

In between and alongside these undoubtedly speculative scenarios there is room for infinite variations. Labor Party leader Amir Peretz, for example (Haaretz, March 3), offers as his "optimal scenario" the following: "Massive aid from humanitarian organizations to moderate Palestinian forces in order that, within two years, Abu Mazen can dismiss the parliament after Fateh cleans itself of corruption. If this happens, the [next] election results will be completely different. On the other hand, if we starve the Palestinians the result will be the opposite."

Further to Peretz's left, a few Israelis are already calling upon Israel to initiate direct negotiations with Hamas immediately (even though Hamas itself apparently rejects such contacts). Interestingly, virtually no one on the Israeli far right is advocating an immediate and comprehensive Israeli military offensive.

Generating scenarios for the coming months of Hamas rule in Palestine is obviously a highly speculative business. Nevertheless, it is one way to provide tools that help us to at least contemplate a situation without precedent in the Middle East and in the history of the Arab-Israel conflict.