Johann Hari: If Israel and its Western allies break Hamas, they will face an even deadlier foe

These crazed young men - the 'troops' of Islamic Jihad - are the children of the first Intifada

I am sitting in a poky bedroom somewhere in Gaza City - I'm not allowed to know where - and opposite me is a huge beaming picture of Osama bin Laden, with the smoke from a burning World Trade Centre forming a black halo around his head. He is surrounded by a gaggle of jihadi angels: some Chechen fighters, Abu Musab al-Zarqawi, and our own Tube bomber, the Yorkshireman Mohammed Sidique Khan. "Would you like to see our weapons?" a masked jihadi says cheerfully, before thrusting a grenade into my hand.

I have come to see what Israel will confront in a generation if - as now looks certain after this weekend - they never, ever deal with the democratically elected Hamas government, but instead resolve to break it.

Coining one of the dullest clichés about the Middle East, Abba Eban, one of Israel's longest-serving foreign ministers, famously claimed that "the Palestinians never miss an opportunity to miss an opportunity". Precisely the opposite is the case. As the Fatah President, Abu Mazen, tried desperately this Saturday to dislodge Hamas by calling for early elections, we need to remember a stark truth. Every time the Israeli government rejects a Palestinian leader because he is too hard-line, they do not get a cuddly Gandhian moderate in his place. They get somebody more hard-line still.

Yasser Arafat endorsed a two-state solution, but couldn't accept a forever-and-always string of Bantustans bisected by Israeli settler-only roads as his half of the deal - so they rocketed and shelled the old man's compound until he died. Many Israelis now look back on Arafat with near-nostalgia. Today the Hamas Prime Minister, Ismail Haniyeh, says he can never accept Israel's existence. But he is offering a 40-year-long hudna (ceasefire) - provided Israel withdraws to the internationally recognised 1967 borders, as they should anyway under international law.

Haniyeh is offering to kick all the tough issues down the road until 2046, and build two peacefully co-existing states, with no mutual violence. His track record of keeping his word on ceasefires is strong: in the current short hudna, Hamas has held its fire even as Fatah fires a few Qassam missiles.

But the governments of America, Europe and Israel are snubbing this deal too. They say Haniyeh has to recognise Israel totally, and today. Until he does, his people will be "put on a diet", in the words of one Israeli government adviser. I have seen what this means: hospitals shut and shuttered across the West Bank, with women left to give birth at home like pre-modern peasants. The yellowish hue of malnutrition on children's faces. The empty and echoing schools.

Tony Blair has been at the forefront of this programme to force Hamas to concede, and is in the Middle East to promote it further. For him, the onus is on the Palestinians living under military occupation to justify why they should be freed - rather than on the people who have been oppressing them on their own land for 39 years to explain why it should continue.

The result of breaking the democratic will of the Palestinian people will not be greater softness on their part. No. It will create more men like Abu Ahmad (a nom de guerre), who I sat with last week in the shadow of Bin Laden in a corner of Gaza.

"I want to kill and kill and kill again. I want to be a killing machine until, inshallah [God willing], I become a martyr," he said, staring at me intensely. He is 27 - my age - and murderous. He has just described how he slashed the throats of four female Israeli soldiers in an illegal settlement in 2002, and he chuckled as he described how they cried for their mothers. "All the Jews have to be killed," he says. The children? The women? "I prefer to kill soldiers, but they must all be killed in time. Soldiers first." The Holocaust did not happen, he says, "but it should have".

These crazed young men - the "troops" of Islamic Jihad - are the children of the first Intifada. They saw their parents peacefully protest, and the Israeli troops be ordered to "break their bones" as punishment. Abu Hamza, a sober, severe 26-year-old, explained he first joined Islamic Jihad when he was 10 - a year after he took his first Israeli bullet in the skull. He had been throwing stones and setting fire to old tyres in the street when it happened, and he became a local celebrity as the first child victim of the violence. "I was so proud," he said. He invited me to feel the scar on the back of his head. "Yes," he said with a smile, "we have been growing in popularity over the past few years. Very much."

All over Gaza and the West Bank, the assault on Hamas is creating groups like this to their right, deranged little pockets that will swell if Hamas is totally humiliated. At the moment, they are small, speaking - as Hamas did a generation ago - for only a small fraction of Palestinians. But for how long?

Last week I tried to trace the footsteps of a new streak of Islamist fanaticism that has jutted suddenly into Gaza over the past month. A group calling itself Swords of Islam has started blowing up internet cafés - a symbol of extra-Koranic knowledge and cosmopolitan connection to the world. They have issued Talibanist threats warning that women who do not wear the hijab will be "burned", and that the internet is a "Zionist plot" to keep people away from "their religious duties".

In a bombed-out café named Montada Donajoun in the Jaballiya refugee camp, I spoke to the terrified owner. Basa Abu-Jased, 29, said, "Of course women are frightened now. [Even as a man] I am really frightened! I used to sit on the street and talk to women. Now I won't do it. You don't know what's going to happen." Almost everybody on the street was too frightened to speculate about who these people were; one woman suggested they were "maniacs who had returned from fighting in Iraq", but then hurried away.

It took a very long time to rouse the Palestinians to violence and produce these pathologies. Between 1967 and 1982 - as 200,000 Palestinians were expelled and more than one-third of their remaining land was stolen by fanatical settlers - just 282 Israelis were killed by Palestinians. But Israeli policies have virtually guaranteed a tip towards great violence and forms of madness. Every time the Palestinians have peacefully protested or negotiated, they have been choked further.

There is still - still - a majority in Palestine for peaceful coexistence with Israel, with 67 per cent supporting the Hamas proposal for a 40-year hudna. But if their democratic will is treated with contempt by humiliating Hamas, this historical window will close. Every year the occupation goes on, more deranged people like Abu Ahmad are smelted. "I love Osama bin Laden," he said to me as we parted, slapping me on the back. "I love killing."

j.hari@independent.co.uk