Political Risk Analysis - Hamas' Softening Rhetoric Unlikely To Improve Prospects For National Unity, Peace With Israel - JULY 2017

BMI View: Hamas ' updated charter will not improve prospects for peace with Israel , as persistent differences with the Palestinian Authority continue to prevent national reconciliation - a precondition for progress in negotiations with the Netanyahu government. Moreover, economic benefits from the charter ' s distancing of Hamas from the Muslim Brotherhood will be relatively limited , as the former ' s ties to Iran and perceived links to militants in the Sinai Peninsula will undermine the potential for any significant reduction in trade barriers with Egypt or increase in aid from the Gulf .

Hamas' May 1 charter update will not improve prospects for Palestinian-Israeli peace. While it puts Hamas more in line with the Palestinian Authority (PA)'s position on Israel, persistent mutual mistrust and diverging ideologies in other areas will prevent the rival bodies from uniting under one administration. This complicates negotiations with Israel, whose government is reluctant to deal with any authority not considered representative of all Palestinians. Moreover, the charter's softening rhetoric does not represent a fundamental change in Hamas' position on Israeli statehood or armed jihad. The US and EU will therefore retain their terrorist designations of the group - ensuring its continued exclusion from Western-led talks and inability to directly receive Western aid. We see some potential economic benefits from the charter's distancing of Hamas from the Muslim Brotherhood, which may strengthen ties with Cairo and some Gulf states and in turn result in fewer restrictions on trade through Egypt and aid inflows. The scope of any such benefits will nevertheless be limited by Hamas' perceived ties to Sinai militants and Iran, and overall, economic conditions in Gaza are set to remain dire for many more years.

Softening Rhetoric Will Not Improve Prospects For Peace

Elevated Risks To Stability
West Bank & Gaza & MENA Average - Short-Term Political Risk Index Scores (Out Of 100)
Note: Lower score = higher risk. Source: BMI

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