Mediation in the Palestinian-Israeli conflict is never too late, but it certainly would have been more effective 10 months ago, before Ehud Olmert and Ismail Haniyya came to power. As a first step, one must recognize that the present crisis is not only about the 19-year old Israeli soldier who was kidnapped by Palestinian militants on June 25, 2006: It has several layers that ought to be analyzed before one steps in as a mediator.

One layer is that it could serve as a pretext to give that final push to eject Hamas from office -- something supported by both Israel and the defeated members of Fatah, who, outflanked by Hamas, see the prospect of Hamas's demise as a blessing in disguise.

Another layer to the confrontation is the degree to which it represents a personal standoff between Haniyya and Olmert, two relatively new leaders who have just assumed the most senior jobs of their careers and are struggling to prove themselves to their respective constituencies. Ariel Sharon did not need war to prove himself to the Israelis -- and that would have enabled him, were he still around, to pursue a less agressive line in this crisis than Olmert's "Summer Rains." Arafat would have had similar flexibility. Ismail Haniyya, however, needs his war medals since he is being criticized from within his own party by hard-liners such as Khalid Meshaal, who blame him for his relatively pragmatic and soft approach vis-a-vis Israel.

Mediating the latest standoff requires more effort than that put forward by Egyptian President Hosni Mubarak and his intelligence chief, General Omar Sulayman. Their proposal -- to release the soldier, secure his safe passage to Egypt and then to Israel in exchange for a limited release of Palestinians, with no timetable -- is simply unattractive to the Palestinians.

The three resistance groups want 1,000 prisoners released, difficult for the Israeli government because it cannot appear to the Israeli public to be soft on violence. It would have been wiser for the Palestinians to have turned the table on the Israelis and demanded, in exchange for releasing the soldier, that they end the embargo imposed on the Palestinian people by allowing funds to be paid to government officials and food to be brought into the Occupied Territories (along with medicine).

Had this proposal been made, it would probably have gained the world's approval, since it has humanitarian appeal, as well as a political angle. It would have also have been difficult for the Israeli public to veto, because the Israeli street, although angry with the victory of Hamas, nevertheless realizes that starving the Palestinians will not make them go away or become less aggressive.

And, since there is no Arafat-style towering personality to keep them under control, these military groups would have been able to continue to operate unchecked against Israel. Arafat, in the first months of Ehud Barak's premiership in 1999-2000, managed to prevent a single bullet from being fired against Israel, to prove his goodwill towards the Labor government. Abbas and Haniyya cannot do that: Abbas because he is unable, Haniyya because he is unwilling.

One possible solution to the present confrontation would be to give Hamas the benefit of the doubt, to give them what they are asking for -- money, food, medicine and security -- then see if they can deliver. Collectively, the Islamic party can boast of a war record in combatting Israel. Collectively, they have their war medals, just like Arafat and Sharon, giving them enough legitimacy to talk and sell peace to the Palestinians and get away with it. Abbas, who nobody sees as a war hero or red-blooded Palestinian nationalist, cannot.

Arafat provides the example. In the 1970s, he went to the United Nations in the 1970s and said that he came carrying "an olive branch and a freedom fighter's gun," and the world believed him. Hamas, before the latest standoff in Gaza, was on the verge of of doing the same, not out of conviction, but out of helplessness. The Israelis should have invested in that turning point to achieve their end result with minimum loss and damage to Israel. They could have hollowed out Hamas, emptying it of its very essence, without firing a single shot at the Palestinians.

They should have made use of freedom fighters with guns who were desperate to establish themselves as statesmen and nation-builders, bent on running schools, paying wages to civil servants and combating corruption. That's what Hamas was voted into office to do in the first place. Giving them the full burden of government would have sidelined them from the resistance -- the way it did Fatah after 1993. Instead of taking advantage of the situation, Israel is bringing Hamas back to the fold of the resistance -- and therefore, bringing Israel back to Square One vis-à-vis the Palestinians.

Had Israel allowed Hamas to take over government, with its full responsibilities, this would have been a win-win scenario for everyone -- everyone, that is, except for Fateh. The Palestinians would have been ruled by the leaders for whom they voted. Hamas would have been firmly in control of government and Israel would have tamed one of its deadliest enemies.

By letting it share power, treating it as a partner, showing it respect, and giving it real duties, Israel could have forced Hamas to share responsibility. It is very similar to what happened in Iraq after the U.S. invasion in 2003. The Americans sidelined the Sunnis for three years, then realized that the keys to security in Iraq, and to ending the insurgency, involved courting the Sunnis and bringing them back to power. By letting them share power, the Americans reasoned, they would also share responsibility for security. They would be obliged, before the voters who voted them into office, to provide the functions of government, including proper security.

The American tactic has by no means ended the resistance in Iraq, nor, if applied by Israel, would it end the resistance in Palestine. But deprived of Hamas and Yasser Arafat, the resistance would become less of a headache to the Israelis -- forcing them to become less of a headache to the Palestinians.