Analysis: A Hamas-Fatah deal is not all bad news for Israel
An agreement on Shalit could be more likely if Gaza is quiet
Palestinian unity talks are to begin this weekend in Cairo with a view to reaching an agreement before the Egyptian-imposed deadline of 7th July.
Israel is watching closely, knowing that it has a lot to gain, but also a great deal to lose, from any Fatah-Hamas rapprochement.
In the basic framework of the plan, members from both Palestinian movements will sent up a temporary government in the Gaza Strip, which will be in charge of administering the Strip until Palestinian elections next year.
Hamas will cease all firing on Israeli targets and ensure that other Palestinian organisations do the same.
Israel and Egypt will open up the border crossings into Gaza for all non-military goods.
In addition, an Egyptian force, perhaps with additional Arab countries, will help keep the peace within Gaza, prevent arms smuggling and ensure that border arrangements are not abused.
In the optimistic scenario, a prolonged period of calm around Gaza, guaranteed by Egypt and the western powers, could be followed by a prisoner deal, including the release of Israeli soldier Gilad Shalit, captured three years ago this week.
Egypt is pushing for this hard, and particularly pressuring Hamas. It is fed up by the prolonged unrest in the Sinai peninsular, and by the power vacuum in Gaza which has attracted radical Islamic elements, Hizbollah and al Qaida into the territory.
With their Iranian patrons distracted by pressing problems at home, the Hamas leadership is also under pressure from the local population in Gaza to deliver a solution that will allow building materials and other goods back into the Strip, six months after Operation Cast Lead ended.
There is a rare opportunity for a long-range ceasefire, but the risks are considerable too.
Over the last five years, the IDF and the General Security Service have succeeded in almost totally eradicating Hamas influence in the West Bank. Over the last year, the Fatah-dominated Palestinian security forces have proved an unlikely ally in keeping Hamas and Islamic Jihad under control.
A Hamas-Fatah truce may change all that and Hamas success in the elections could allow them to return to the West Bank through the main door.
Another major worry for Israel is the creeping recognition of Hamas by some EU governments and by certain elements in the Obama administration even before it agrees to recognise Israel, disavow violence and commit to the agreements already signed between Israel and the PA.
This process will almost certainly intensify once Hamas enters a power sharing system with Hamas. Heads of state and foreign ministers will run to meet with Hamas leaders once Gaza is open and they are sitting again in the Ramallah parliament. There will be very little Israel can do about it.
But the biggest concern is that the period of calm will give Hamas the necessary time to rebuild its military capabilities and train its fighters in light of the lessons it learnt from the pummelling it received from the IDF. Ready for the inevitable day when this truce also falls through.