As difficult as it is to fathom today—when Gaza is walled off from Israel and Egypt by a border that would do the Warsaw Pact proud—there was a time when Israelis and Palestinians travelled freely and without incident between Israel and the Palestinian territories captured by Israel in June 1967.

Soon after Ariel Sharon was appointed defense minister by then-Prime Minister Menachem Begin in 1981, Sharon ordered the removal of the two lawn chairs manned by sleepy recruits marking the border which was all that was left of the visible boundary separating the Gaza Strip from Israel.

At the same time, on Israel’s northern frontier, Sharon put into motion a military plan to destroy the Palestine Liberation Organization (PLO), then based across the border in Lebanon. These initiatives, in Gaza and Lebanon, were integrated elements of a unified strategic concept—Israel’s disastrous campaign to destroy the Palestinian national movement. By making war against the PLO in Lebanon, Sharon planned to destroy the political foundation for Palestinian nationalism. In Gaza, an energized campaign of Israeli civilian settlement across an invisible border separating Israel proper from “liberated” Gaza would strike at the heart of Palestinian control over territory—the other key ingredient necessary for the creation of a Palestinian state. Sharon’ s policy of “creating facts on the ground,” in Gaza and elsewhere, was the flip side of the planned destruction of the PLO—a one-two punch that would forever undermine the Palestinian claim to sovereignty anywhere in Palestine.

Sharon failed spectacularly on both counts. Throughout the 1980s, the PLO survived the Israeli assault on Lebanon to fight . . . and negotiate another day. In September 2005 Israeli settlers and the Israeli army retreated across the newly fortified Gaza border.

Sharon too was the author of Israel’s retreat from Gaza in 2005. This surprise move was by no means the end of the story. It was rather the beginning of a new, more destructive and brutal Israeli policy that aimed to reduce its considerable responsibilities as an occupying power still in effective control of Gaza. Israel, under international law, continues to be responsible for the welfare of Gaza’s Palestinians. This is cold comfort to two million Gazans who notwithstanding the Israeli retreat, as a consequence of Israeli decisions, are now more than ever dependent upon Israel for their well being.

By any index, the misery manufactured by Israel’s enhanced enforcement of the “siege” preventing Gaza from the free import and export of goods and transit in the wake of Fatah’s ouster from Gaza by Hamas in June 2007, and the accommodation to this policy by Gaza’s neighbor Egypt and the international community, threaten to make the Gaza Strip “uninhabitable” by 2020. Palestinians have endured a policy of punishing sanctions for a generation, but they have failed to compel either Israel or Egypt to abandon their strategies, or to win enough international support on their behalf. Politically dysfunctional and without imagination, neither Hamas nor Fatah has had an idea of any consequence for at least a decade. The ability of other Palestinian actors to challenge their leadership, however ineffective, is limited because of the absence of sufficient cadres and organization on the ground and in the camps where most Palestinian refugees live.

Fatah under Mahmoud Abbas has all but abandoned Gaza as a political or economic project. As it looks to the future it cannot see beyond its decade-old demand to remove Hamas as the principal Palestinian political and security voice in Gaza if not elsewhere.

Hamas has defied the odds. It has convinced Israel of its staying power and retained broad popular support in an environment conditioned by an international effort to subvert it. Yet, while it has succeeded in the security sphere to establish a rough and unstable deterrence vis-a-vis Israel, it has been unable to impose either its economic objective—an end to the siege—or broader political goal of Palestinian sovereignty.

These Palestinian shortcomings will not soon be remedied. Indeed, the international and Arab environments have never been less hospitable to Palestinian efforts, should they materialize, to establish a diplomatic foundation for political or economic progress according to Palestinian preferences.

Washington and the broader international community have set the bar for Gaza quite low. In the best case, they are dissatisfied with the disastrous effects of the “diet” Gazans are forced to endure. However, wedded to the political prerequisite of regime change in Gaza, the international community lacks the interest to summon the political will to effectively challenge the status quo. The recent stillborn U.S. conference to mobilize limited humanitarian support for Gaza is a typical case in point.

Israel, which remains the principal agent of this policy, also holds the keys to policies that would reduce the manufactured misery and the inherent instability of the military standoff between Israel and Hamas that for too long has been Gaza’s fate.

Ironically, the main hope for an amelioration of conditions in Gaza is Israel, which is slowly coming to the realization that the instability and disastrous living conditions produced by its policies undermine the Israeli interest in securing the border and reducing international pressure, however inadequate, for a new Palestinian diplomatic and economic agenda in Gaza and beyond.

The battle for a change in Israeli policy in this direction has yet to be won. Indeed, there are many Israeli voices that, secure in the knowledge that the option is untenable, continue to demand the ouster of Hamas and the return of the IDF to Jabaliya.

These are vocal but minority voices. Israel has no aspiration or interest in ruling Gaza or in being responsible for its welfare. But after more than a decade, the realization is growing, particularly in Israel’s security and intelligences systems, that Gaza’s “diet” is no longer working for Israel.

To the extent that it is interested in an amelioration of the conditions caused principally by its policies, Israel is also concerned about protecting its interest in reducing its Gaza footprint by continuing Sharon’s 2005 effort to turn Gaza into another Albania—that is, a foreign state about which Israel has little interest and no responsibility.

Neither Palestinians nor the international community see reason to exploit this Israeli desire to reduce its Gaza exposure. Instead, it is Israel’s security system—which is bearing the brunt of the instability caused by the siege—that is today the prime mover of the internal Israeli debate on “what next in Gaza.”

The spectrum of ideas under consideration in Israel on how to improve conditions in the Gaza Strip begins with support for improved water, sanitation, and electricity networks. It also includes suggestions to enable Palestinian day laborers to work in Israel and a loosening of import–export restrictions to enable a resumption of manufacturing. More ambitious and far–reaching ideas include progress on offshore gas reserves, and the establishment of a seaport and/or airport in Gaza in order to enable Israel and Egypt to reduce their interaction across the land borders on Gaza’s north (Israel) and southern (Egypt) perimeters. This latter option has been a key demand of Hamas.

The prospects for any Israeli initiative, however, are circumscribed by Israel’s continuing failure to confront the shortcomings of the status quo. Cabinet discussion is haphazard and episodic, without a sense of strategic direction, let alone innovation.

“We can give small carrots,” explained an Israeli military officer familiar with the top-level debate. “We can be led and roll down the slope, and we can respond and enter a small or big arrangement. We can keep managing tactical incidents on the border, but in Gaza the intervals between tactical incidents and strategic events are small. We must bring stabilizers into the Strip.”

Gaza, however, is in need of much more than just “stabilizers.” Israel understandably is primarily concerned with addressing its own interests. Who then will stand up for the interests of Palestine?

Geoffrey Aronson is chairman and co-founder of The Mortons Group and a non-resident scholar at the Middle East Institute.