ANALYSISToday, Gaza is devastated. Its 1.8 million people traumatised, wounded, largely unemployed and in despair. Half a million are homeless. Having faced thousands of tons of bombs and 40,000 Israeli soldiers invading on the ground, Gaza, as described by journalists who have visited in the past days, looks like an earthquake zone - entire areas completely levelled. Billions of dollars will be required to rebuild it.

Although about 50 per cent of the population is under the age of 14, there is almost no illiteracy in Gaza. There are five universities. Before the war, there were seven hospitals, now there are five.

There are no advanced medical services offering services such as cancer care, dialysis or transplants. Existing under economic blockades for the past seven years, the economy of Gaza has been destroyed.

Once, Gaza had a productive economy with hundreds of small factories and workshops. There were many subcontractors for Israeli companies - at the peak ,some 120,000 Gazans worked in Israel.

Gazans are educated, industrious and entrepreneurial - they are survivors. Most Gazans are descendants of refugees from 1948 who have not given up their hope for the right of return to their original homes and villages in Israel which, for the most part, no longer exist. Nonetheless, most of them have built a new life for themselves in the Strip. Most Gazans dream of having a normal life - a home, family, job, food on their table, the ability to travel and move freely. Most Gazans do not wake up in the morning and think about how they can destroy Israel or kills Jews.

I have not visited in Gaza since June 2007 when Hamas conducted its bloody coup and the Strip became off limits for Israelis. But I had visited there many times in the past and always enjoyed my visits there. Gazans are coastal people - the sea influences life and even when down and out, a walk along the shore can brighten even the darkest day. The area has huge potential for change, development and even prosperity.

The willingness of the international community led by the oil-rich Arab world to provide finance for Gaza's reconstruction makes it a task which is doable. But what is the sense in rebuilding, only for it to be demolished in a new round of war?

Some Israeli leaders have proposed the formula of reconstruction in exchange for decommissioning. The rationale for this proposal is if we throw enough money at the problem, it will go away. But the problem is not solely the lack of economic development and opportunity. The main problem is the continuation of the Israeli-Palestinian conflict.

Gaza is part of Palestine - it is part of the Palestinian consciousness, part of its identity, part of its soul and cannot be detached from the rest of the Palestinian-Israeli conflict. Hamas is not only an Islamic movement; it is a Palestinian national movement. It seeks to liberate Palestine first and only then to convert it into an Islamic state. It is interesting to note that even though it had full control over Gaza since 2007, the Hamas government in Gaza was a secular one, not an Islamic government.

Hamas is part of the Palestinian people and its base of support is firm within that society. It thrives on conflict and profits from violence - its own and that used against it.

If Hamas has the ability to claim even the smallest victory, the stability and security of the entire surrounding region could be in danger.

However, if the "benefits" of this war could be credited to the PLO and its leader, Mahmoud Abbas, and if that leads to a genuine peace process of serious direct negotiations in which Gaza is included in the future Palestinian state, there could be positive outcomes for all, including Israel.

Right now, that decision is very much in the hands of the Israeli government. But it seems that the government of Israel, and its prime minister have yet to make a decision on the geo-strategic changes it would like to see after this war and what it is prepared to do to implement those changes.

Gershon Baskin is the Co-Chairman of IPCRI, the Israel Palestine Creative Regional Initiatives, and the initiator and negotiator for the release of Gilad Shalit