I think Hamas has significantly overplayed their hand here, likely thinking they wouldn't be as successful as they have been in their terrorism. They lost the sympathy of the world and have essentially handed Israel a card blanche (at least in the short term) to do whatever they want in Gaza. This is a once in a century chance for Israel to go in, remove whomever they want and then install a puppet government (or turn the whole area into a giant refugee camp). There is no doubt in my mind that they have planned their next steps in prepatory war games for the last 50 years. Unless this drags out, world sympathy will not shift back to the Palestinians after the images that were released (and unfortunately Palestinians and Hamas will conveniently be painted with the same brush).
Hamas has no options. If they graphically execute hostages, the western world (and arab world) will further support Israel. Any remaining rockets will inflict marginal damage at best now. Their best case scenario is that Gaza becomes a war zone for enemy combatants of Israel and inflicts maximum damage, but you have to sustain that level of fighting in the place you live. In the interim, the US and other neighbors will ensure that nobody else gets involved (outside of maybe Syria). None of them want to be overwhelmed by a refugee crisis and have their own internal Arab conflicts.
This is different from September 11 in that the US was not under direct neighborly or existential threat. For Israel, this is existential and as such the population will be a lot more supportive of a longer (more painful) conflict. They won't respond/prioritize hostage negotiations.
There are a couple of loose ends that I wonder about:
1. Hamas clearly didn't think this through, which leads me to believe that it was either a very isolated event or that they were incentivized by others. This could suggest Iranian or Russian involvement.
2. The last domino to fall (and I am making the assumption that both Lebanon and Iran will not actively get involved as: US presence, Israel power and the incentive to avoid WW3 will act as deterents) is Syria...Again, if Russia/Iran want to use a proxy, this would be where the aggression comes from.
All of the above is really a worst case scenario for all involved. Palestinians get further away from getting their own state and have now lost significant empathy. The world goes closer to WW3 and has moved focus away from the attrocities that Russia is committing in Ukraine. Israel has experienced a disgusting terrorist attack. Hamas will not exist after this outside of fringe extremists and Israel will ensure that there is enough "buffer" that this never happens again. The only question is whether or not they carry that buffer all the way to the coast.
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