The multistranded threads of a Palestinian settlement seemed to be drawn a little closer this week. Speaking from Damascus, Hamas political head Khaled Meshaal said Hamas had committed itself to a political solution based around the National Reconciliation document returning Israel to its pre-1967 borders allowing the formation of a Palestinian state in the West Bank and the Gaza Strip with its capital in East Jerusalem. This is exactly what the Saudi-proposed Arab peace initiative calls for, and Hamas’ change of heart is welcome.

Meanwhile, rivals Hamas and Fatah are planning to meet again, one of the few things they agreed when Yemen hosted reconciliation talks between them in Sanaa last month. Next Monday, Palestinian President Mahmoud Abbas is due to hold talks with Israeli Premier Ehud Olmert, to see if their negotiating teams cannot agree a draft settlement on which substantive negotiations can finally begin.

Washington, meanwhile, continues to press for a year-end deal. Despite President Bush’s patent craving for just one foreign policy success for his lackluster two-term administration, this impetus presents real opportunities in the coming months. The way forward must lie in seeing the violent exchanges between Palestinians and Israelis for what they are — not terrorism — but a war of blow and counterblow, attack and reprisal. Wars end first with a truce and then with a peace.

Even the most dedicated Zionists now know that however hard they strike at the Palestinians, they can never destroy their resistance. For the Israelis, a chilling part of Meshaal’s latest message was that Hamas wanted a truce and a settlement but was fully resigned to the possibility that it could take “many years”. For Palestinians, a continuation of their agony can hardly be welcome but when a people have little else to lose but their lives, they discover a grim and enduring strength.

Though Hamas continues to refuse to recognize the state of Israel, outsiders of good will who are urging on the peace process can try and argue that demanding the Israelis retreat behind the 1967 borders could constitute a de facto recognition of the reality of its state.

A major key to progress is the inclusion of Hamas in the political process. That will only happen if the Bush administration is prepared to talk directly or at a remove with its leadership. The refusal to “ talk to terrorists” is nonsense. Fatah was once called “terrorists”. So were Zionists. But Bush is talking to them. A divided Palestine cannot make a deal. Just because Washington finds Hamas unacceptable, that is not going to make them go away. Bush needs to sit up and smell the coffee. The Palestinian peace that will secure his place in history cannot become a reality unless it is negotiated and signed by all Palestinians. He squandered his first chance to deal with Hamas after their election victory. He must not miss it again.