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measures in the West Bank; or if President Trump’s plan for an Israeli-Palestinian agreement is released and does
not relate to a Palestinian state or include recognition of Israeli annexation.

In 2020, Hamas is expected to continue to organize demonstrations against Israel and perpetrate violent incidents
along the border in order to reach improved understandings for an arrangement, including removal of the “blockade”
and programs for reconstruction and new infrastructure in Gaza, with an emphasis on a maritime port. In exchange,
Hamas would agree to an extended and comprehensive ceasefire. In the framework of a broad agreement and in
return for the extensive release of prisoners held by Israel, it is possible that it would agree to release the Israeli
civilians and the bodies of Israeli soldiers. However, Hamas will not surrender its efforts to develop and maintain
the means of struggle at its disposal (from explosive kites and drones to rockets, UAVs, and tunnels) – which aim to
deter Israel from military campaigns in Gaza and to pressure it as part of the Egyptian-mediated negotiations for
an arrangement. In this context, Hamas’s reluctance to join Islamic Jihad in the escalation with Israel in November
2019 can be seen as reflecting its interest in an agreement.

If Israel and Hamas do not reach and implement understandings on an extended ceasefire, the likelihood of a large-
scale military conflict in the Gaza Strip will increase – in the form of an undesired escalation that occurs contrary to
the interests of both sides (as with Operation Protective Edge in the summer of 2014). Israel’s objective in a military
operation would be to cause serious damage to the Hamas and Islamic Jihad military wings to the point of dismantling
them, while leaving Hamas in place as a functioning governing authority and avoiding a scenario whereby one of
the rogue Salafi organizations takes over or the IDF is drawn into resuming control over Gaza.

While the IDF is prepared for large-scale military action in Gaza, it is not clear what its exit strategy would be. Although
the IDF would seek to withdraw all of its forces immediately after a campaign, the stabilization of the Strip on the day
after a campaign remains an open question. In this case, there are two possible scenarios: the first is a clear military
achievement for Israel, which would involve heavy losses, followed by the formulation of an arrangement similar
in essence to what Hamas is willing to agree on today. The second is the overthrow of Hamas, whether intentional
or not, leaving a governance vacuum in Gaza that would lead to chaos that could draw Israel back to the Gaza Strip.

Recommendations for Israeli Policy

The Palestinian problem was and remains on Israel’s doorstep. The
consequences of the strategic distress in the Palestinian system do not
benefit Israel, and they increase the likelihood of escalation in the Gaza
Strip and the West Bank. However, the current situation enables Israel to
shape a more favorable architecture of relations with the Palestinians, even
without a comprehensive agreement, by promoting political, territorial,
and demographic separation and an independent and distinct Palestinian
entity in the West Bank, along with limited steps on an arrangement in the
Gaza Strip that would at least enable postponement of a future conflict. To
this end, Israel must act along two channels:

The first is strengthening the Palestinian Authority as the sole legitimate
entity for a future agreement, while bolstering it as a responsible,
functioning, and stable authority and fostering economic growth. Israel
should set a political objective of achieving transitional arrangements
that would shape the separation and outline the conditions for a future
reality of two states, based on the INSS Plan, A Strategic Framework for
the Israeli-Palestinian Arena.

The second is seeing Hamas as the entity temporarily responsible for the Gaza Strip and achieving an extended
ceasefire with it, in exchange for significantly easing the closure; and in parallel, maintaining the close coordination
with Egypt and the UN or the Quartet to advance vital humanitarian projects in Gaza, with the assistance of the
international community.

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