Rice flies in as Gaza faces renewed threat of Israeli invasion

A year after Hamas's takeover of the enclave, it may be close to another turning point. By Donald Macintyre in Gaza City

Condoleezza Rice, the US Secretary of State, returns to the Middle East this week for yet another round of shuttle diplomacy aimed at bolstering the flagging hopes of a negotiated agreement on a future two-state solution between Israel and the moderate Palestinian leadership based in the West Bank.

What she cannot ignore, however, is what the State Department spokesman Sean McCormack, announcing her trip, cryptically called "the situation in Gaza". For in the week that marks the first anniversary of Hamas's enforced takeover of the Strip, Gaza could be nearing another turning point.

This week, Israeli ministers will again consider whether to pursue a ceasefire, after Egypt brokered an agreement among militant armed factions to drop their earlier precondition that Israel also stop military operations in the West Bank. But another scenario is that the Israelis will mount a full-scale invasion of the Strip

A majority of the Israeli security cabinet currently appears to be opposed to a ceasefire – at least without the return of Gilad Shalit, the Israeli corporal seized by Gaza militants two years ago this month. Such opposition was reinforced by the killing on Thursday of a 51-year-old Israeli father of three in a mortar attack by Gaza militants on a Negev kibbutz. His death was followed by that of a six-year-old Palestinian girl in an air strike aimed at militants.

Whatever option is taken, the debate testifies to the failure of the Strip's closure, imposed by Israel a year ago this week. Apart from the most basic humanitarian supplies, and a severely limited amount of fuel, nearly all other goods have been prevented from going in or out. But this has not stopped the rocket and mortar attacks, let alone dislodge Hamas from its control of Gaza.

"I am the king of cooking oil," boasted Abed al-Khour, 52, as he described trying to eke out a living as a taxi driver, with black-market prices for diesel up from £13 to £53 a gallon. "I buy one gallon of diesel, then mix it with two gallons of soya cooking oil which each cost me 130 shekels (£20). I have no other choice. We depend on God. I have 25 people in my family to look after."

The phone scarcely rings in his boss Sayed al-Gherbawi's taxi office, once one of the busiest in Gaza City. Of his 20 staff, 17 have been laid off. But at least it is – just – ticking over, in contrast to virtually all manufacturing industry, such as the hundreds of clothing firms that used to supply the Israeli market. "It's not so long since the private sector was the largest employer in Gaza," says business consultant Sami Abdel Shafi. "Now we have a nullified business environment and a demolished economy in the shadows of a severe black market."

The frustration that Mr al- Gherbawi, no Hamas supporter, feels is compounded by the sense of having been abandoned by the emergency government's Palestinian President, Mahmoud Abbas of Fatah, installed in Ramallah after the Islamic faction's takeover. "Ramallah is the legitimate government," he insists. "But they are not doing anything for us."

As it happens, Mr Abbas, possibly out of frustration with the slow progress of talks with Israel, last week issued a surprise call for a "national dialogue" with Hamas. It was apparently aimed at eventual restoration of the "national unity" coalition between Hamas, which was cleanly elected to power in 2006, and Fatah. The breakdown of that coalition, so deeply disliked by the US and Israel, paved the way for Hamas's bloody takeover of Gaza a year ago.

If Mr Abbas is sincere, it can't come soon enough for Mohammed al-Khouli, 39, who has been struggling for weeks to keep his bakery going amid regular power cuts and shortages of diesel for his generator and cooking gas for the ovens. "The victims of this [blockade] are not Ramallah or Hamas," he says. "The victims are the people."

It's hard to see any other way. The idea of a popular revolt removing Hamas seems as implausible as Fatah riding back to power on the back of an Israeli invasion. Everyday security and order for ordinary Gazans has undoubtedly improved in the past year because of Hamas's police force, but the reverse of the coin is precisely the internal control Hamas now exercises.

A fresh dialogue between Fatah and Hamas would be uncharted territory. Israel might well break off its current negotiations with Mr Abbas, but then he might be obliged to do the same if Israel launches its threatened invasion. Either way, says Sami Abdel Shafi, Gaza's increasingly desperate civilian population is exposed to a series of "mixed messages" from every side. "When no one knows what to believe, hope dwindles."