The inconvenient history of Netanyahu and Hamas

How Israel propped up the perfect villains to deny Palestinian statehood

Albanese announced this week that Australia will move to recognise a state of Palestine at the next UN meeting in September, with a condition that Hamas play no role in its future governance. “Australia will recognise the right of the Palestinian people to a state of their own,” Albanese said. “A two-state solution is humanity’s best hope to break the cycle of violence.”

While it’s a welcome and overdue step, it’s also likely to be futile, especially in breaking the cycle of violence: Israel’s Knesset has overwhelmingly rejected recognition of Palestine and a two-state solution, as reiterated recently by Netanyahu; and the significant other party in the conflict, Hamas, has also rejected any deal that excludes them or requires their demilitarisation.

The Albanese government has refused to carry out any practical action that would hinder Israel’s genocide in Gaza (for example sanctions, or expelling diplomats, or ceasing to supply military equipment used in Israel’s assault on Gaza). Instead, it has made a symbolic gesture towards a “resolution” it knows is already dead in the water.

The Knesset rejected Palestinian statehood last year (voting 68-9), on the grounds that the establishment of “a Palestinian state in the heart of the Land of Israel will pose an existential danger to the State of Israel and its citizens”, because “it will only be a matter of a short time until Hamas takes over the Palestinian state and turns it into a radical Islamic terror base”.

Since October 7, 2023, for understandable reasons Hamas has become Israel’s go-to response to every criticism. This has been taken to ridiculous degrees: Mass starvation? Blame Hamas. Hospitals were bombed? Hamas tunnels. Journalists assassinated? Hamas. Collective punishment of all Gazan civilians? They voted for Hamas. Even the children? Guilty by association.

Netanyahu has threatened to invade Gaza City, even against the wishes of IDF senior command, on the grounds that this is necessary to eradicate Hamas. Not because it will pave the way for peace negotiations, though. Such an invasion, most experts agree, will only bring more violence and destruction to Gaza. It will risk the lives of the remaining Israeli hostages, and be highly unlikely to eliminate Hamas. Netanyahu knows this. Peace is not the point of the exercise. Hamas will never be completely eliminated, not just because it’s an unachievable goal (as 600 former IDF and intelligence personnel recently attested in an open letter to Trump), but because Hamas is valuable to Netanyahu – as a villain.

Hamas is no longer a major strategic threat to Israel – it’s too depleted for that. But for Netanyahu, who believes the real threat to Israel is the possibility of a Palestinian state, Hamas is the perfect foil. While Hamas exists, he argues, and as the Knesset resolution agrees, a Palestinian state must not.

“Everyone knows that I am the one who for decades blocked the establishment of a Palestinian state that would endanger our existence,” Netanyahu boasted last year. Hamas has been central to his strategy. In fact, as the historical record shows, for years Netanyahu helped shore up Hamas in Gaza, for just this reason.

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The day after the horrific Hamas attack on October 7, 2023, the Times of Israel published an opinion article titled “For years, Netanyahu propped up Hamas. Now it’s blown up in our faces”. Netanyahu’s policy “of treating the terror group as a partner, at the expense of (Palestinian Authority President) Abbas and Palestinian statehood, has resulted in wounds that will take Israel years to heal from”, wrote political correspondent Tal Schneider.

The following day, Israeli historian Dmitry Shumsky asked, in Haaretz, “Why Did Netanyahu Want to Strengthen Hamas?” He wrote that Netanyahu had “developed and advanced a destructive, warped political doctrine” whose purpose “was to perpetuate the rift between Hamas in Gaza and the Palestinian Authority in the West Bank. That would preserve the diplomatic paralysis and forever remove the ‘danger’ of negotiations with the Palestinians over the partition of Israel into two states – on the argument that the Palestinian Authority doesn’t represent all the Palestinians.”

He quoted Netanyahu’s defence of this strategy: “‘Anyone who wants to thwart the establishment of a Palestinian state has to support bolstering Hamas and transferring money to Hamas,’ Netanyahu told a meeting of his Likud party’s Knesset members in March 2019. ‘This is part of our strategy.’”

The New York Times reported on the unofficial arrangement in December 2023: “For years, the Qatari government had been sending millions of dollars a month into the Gaza Strip –money that helped prop up the Hamas government there. Prime Minister Benjamin Netanyahu of Israel not only tolerated those payments, he had encouraged them.

“Allowing the payments – billions of dollars over roughly a decade – was a gamble by Mr. Netanyahu that a steady flow of money would maintain peace in Gaza ... and keep Hamas focused on governing, not fighting.”

The monthly cash payments of between US$15m and $30m were literally delivered with Israel’s support to Gazan officials in suitcases, when the latter ran out of money after being cut off by the Palestinian Authority over a decade ago. Israeli intelligence knew specifically who the suitcases were being delivered to.

The Qatari payments were facilitated on the flawed assessment that Hamas was neither interested in nor capable of a large-scale attack. A former senior Israeli Defense Ministry official, Major General Amos Gilad, later told CNN that there was also an illusion that “if you fed them (Hamas) with money, they would be tamed.”

While ostensibly a secret, the payments had been widely discussed in both Israeli and US media for years. Even the US Council of Foreign Relations has acknowledged “the knowledge and cooperation of the Israeli government” in the payments, in its backgrounder about Hamas.

The strategy was sometimes disparaged as irresponsible by Netanyahu’s critics, but after October 7 it became the subject of “ruthless reassessment”, according to the New York Times. The reassessments included criticisms that Israel had failed to protect its citizens, and also that intelligence officials had warned the government about the risk of cash being funnelled into Hamas military operations.

A 2015 interview with Israel’s current finance minister Bezalel Smotrich also re-emerged, in which he had explained that Hamas’s militancy was a boon for this political strategy: “The Palestinian Authority is a burden, and Hamas is an asset,” Smotrich said. “It’s a terrorist organization, no one will recognize it, no one will give it status at the [International Criminal Court], no one will let it put forth a resolution at the U.N. Security Council.”

Evidently none of the champions of this strategy envisaged that a terrorist organisation with large cash reserves would launch a large terrorist attack.

Netanyahu’s shadow-strategy had been carried out in different forms under various administrations, emerging and regressing in between long periods of Hamas terror attacks and IDF reprisals – and even amid them.

In an interview with Ynet news in May 2019, Netanyahu associate Gershon Hacohen, a major general in the reserves, admitted, “We need to tell the truth. Netanyahu’s strategy is to prevent the option of two states, so he is turning Hamas into his closest partner. Openly Hamas is an enemy. Covertly, it’s an ally.”

In a May 2019 tweet, Israel’s Channel 13 quoted Egyptian President Hosni Mubarak saying: “Netanyahu isn’t interested in the two-state solution. Rather, he wants to separate Gaza from the West Bank, as he told me at the end of 2010.”

Avner Cohen, a retired Israeli official who worked in Gaza for two decades, told the Wall Street Journal in 2009 that long before the suitcases of cash, Israel tolerated and, in some cases, encouraged Hamas as a counterweight to the secular nationalists of the PLO and its dominant faction, Yasser Arafat’s Fatah (which later morphed into the Palestinian Authority). Arafat referred to Hamas as “a creature of Israel”, while Cohen called it “Israel’s creation”.

Former Israeli Brig. Gen. Yitzhak Segev, military governor in Gaza in the early 1980s, also told a New York Times reporter that he had helped finance the Palestinian Islamist movement for years as a “counterweight” to the PLO.

The general strategy was defended as risk management, both to contain the physical threat of Hamas and the “threat” of a Palestinian state. “We control the height of the flames”, was another way Netanyahu described it. Sometimes it was defended as allowing necessary aid into Gaza, for the sake of civilians (as if suitcases of cash were better than coordinated international aid by dedicated NGOs).

For obvious if depressing reasons, much of this context has been buried in recent years. It seems absurd to accuse the Netanyahu government today of anything other than fighting Hamas to the death (along with everyone else in Gaza). But Hamas will never be completely eliminated, because its existence is how Israel justifies its violence. There’s a corollary to this, too, although it’s rarely acknowledged in public debates: as long as Israel oppresses Palestinian people, there will be violent resistance, by Hamas or something like it. As Freud said about things that have been repressed: they return.

While the strategy of propping up Hamas may have gone up in smoke on October 7, its central tenet remains in place today: Hamas is still how Israel denies Palestinian statehood.

Nations such as Australia have fallen for this charade, wringing their hands as any chance of peace is fouled by the extremism of both the Israeli government and Hamas. As Israeli academic and commentator Avi Bar’el wrote this week, “There is nothing that should excite the Palestinians or unsettle Israel in the announcements by a growing number of countries expressing their intention to recognize a Palestinian state.” He noted the further complication of American influence: “Such a state requires approval from the UN Security Council, where a U.S. veto is guaranteed.”

The international community possesses far more effective means to influence and pressure Israel to end the destruction and mass killings of Palestinians, but fails to use them. “Symbolic statehood,” Bar’el said, “has become a moral escape hatch, not a policy.”

The other reason this inconvenient history has been shoved down the memory hole, I believe, is that the cognitive dissonance became too great: Netanyahu was leading Israel into genocide in Gaza for its crime of supporting Hamas, when he had been doing the very same thing.