Little town lessons

One way to understand the Hamas victory in last month's parliamentary elections is to look at Bethlehem. Western tourists who remember Manger Square with its clogged churches and bustling vendors will find it much changed.

About 12 years ago the city of Jesus' birth had a population under 100,000 that was roughly 60 percent Christian. Unemployment, thanks to commerce with nearby Jerusalem and a steady tourist trade, rested at just 2 percent. That changed after Israel signed on to the Oslo accords in 1993 and began turning over towns in Gaza and the West Bank to then-Palestinian Authority chairman Yasser Arafat.

In 1994 Mr. Arafat redrew Bethlehem's municipal boundaries to incorporate three Palestinian refugee camps-adding 30,000 Muslims to the city's roster. Mr. Arafat championed Muslim immigration to Bethlehem from nearby Hebron, a city also newly given to his control.

By 2001 Christians had sunk to a minority in Bethlehem, representing only 20 percent out of a population of about 150,000-dramatically shifting the course of local elections. Mr. Arafat appointed a Muslim from Hebron to be governor of the district, and local Fatah leaders took control of the city council. The atmosphere, along with the demographics, altered dramatically. Militant groups extorted protection payments from Christian merchants or forced them to close. Banks gave no-interest loans to Arabs but refused to loan money to Christian business owners.

Islamic militants showed their callow regard for the city's heritage when, in 2002, 40 gunmen holed up inside the Church of the Nativity during an Israeli Defense Forces raid. The gunmen took nearly 250 people hostage in what became a five-week standoff.

The tension drove Christians out of business and out of Bethlehem. Since 2002, according to the State Department's most recent religious freedom report, 2,800 Christians have left Bethlehem for other countries. A walk through deserted streets where shopkeepers once sold olivewood crosses suggests the number may be higher.

Those who leave cite violence and dwindling economic opportunities as their reasons, and not all stemming from Muslim hostility: Israel's decision to build a security fence blocking Bethlehem from Jerusalem and to impose checkpoints further dampened opportunities for most Christians. Today unemployment in the district stands at 40 percent.

For locals, then, it wasn't unexpected to see Hamas dominate the January polls in Bethlehem and elsewhere. In a decade Bethlehem's local government had gone from a majority soundly in the hands of Christians, to a Fatah majority under Mr. Arafat, to majority rule by Hamas. Outside the Church of the Nativity, Hamas supporters spread prayer rugs and hoisted green flags and poured from a nearby mosque in celebration following the election.

Bethlehem's demographic transformation is symptomatic of what has happened across areas controlled by the Palestinian Authority in the decade since the peace accords were implemented, as what were once pluralistic if poor enclaves in Palestinian areas-areas where Bedouins, Christians, and other minorities were as likely to predominate as Arab Muslims-increasingly came to be dominated by militant Islamic powerbrokers.

In just the past year Hamas won municipal elections in 81 separate localities-cities, towns, and villages altogether representing over 1 million people. City councils in Jenin, Qalqilya, and Nablus, all in the West Bank, moved from Fatah to Hamas control in 2005, while Hamas improved local margins in Ramallah and Bethlehem.

For Hamas leaders, winning local support looks easy compared to winning international acceptance. Not since 9/11 has one terror group moved so quickly to unite diverse world leaders. UN Secretary Kofi Annan joined President George Bush, British Prime Minister Tony Blair, French President Jacques Chirac, and others threatening a halt to foreign aid.

Israel on Feb. 1 froze the transfer of millions of dollars in tax rebates and customs payments to the Palestinian Authority (PA)-$45 million in January revenue normally allocated to the PA. The United States and European Union funnel about $900 million to the PA each year, most for infrastructure and reconstruction projects. That money may be in doubt, too, as Western leaders press for Hamas to renounce violence and recognize Israel.

Crunch time is now, World Bank president James Wolfensohn told business leaders gathered at Davos for the World Economic Forum. "The Palestinians are basically bankrupt," he said.

Some Arab states, led by Egypt, were similarly blunt in calling on Hamas to recognize Israel and to lay down its weapons. "When you sit in the parliament, you talk with your tongue and not with a gun," said Egyptian Foreign Minister Ahmed Aboul Gheit. "[Hamas] should not run away from the reality." Egyptian intelligence chief Omar Suleiman said, "Nobody will talk to them before they stop violence, recognize Israel and accept [peace] agreements, including the road map." Jordan also called on Hamas to change.

Thus far, the Hamas stand isn't budging. Mohammed Nazzal, a Hamas leader, told Al Arabiya TV, "The Americans and the European Union are dreaming if they think they can force us to change our positions." He called plans to restrict aid "blackmail."

Many experts doubt the West has the will or solidarity to clamp a serious blockade on aid to Palestinians.

"If you cut off all means of support immediately and called on other countries to do so until Hamas renounces all violence and recognizes Israel-not only in word but backed up in deed-then you might see progress," said director of Jihad Watch Robert Spencer. "But there is zero chance that Hamas will do that. Americans are dreaming if they think Hamas will do that."

Even as Palestinian workers stormed government buildings in Ramallah, angry at missing payday, the fissures in boycott efforts surfaced. Saudi Arabia pledged $20 million and Qatar promised $13 million to help the PA pay its January salaries.