Israel In Disarray.

A confrontation with public sector workers on March 21 added to the Israeli government's mounting woes as the powerful Histadrut labour federation staged a short-lived general strike which grounded flights, disrupted domestic transport and closed government offices. PM Olmert, who recently acknowledged his unpopularity at a meeting of his Kadima party, was already under pressure from a string of scandals surrounding him and fellow ministers.

Last week the government found itself on the defensive as it sought to prop up a crumbling international boycott of the PA. Finance Minister Avraham Hirschson, who on March 20 called a press conference on developments in the labour dispute, was obliged to fend off questions about a corruption investigation in which he had been questioned by police for seven hours earlier in the day.

The Hirschson affair is the latest scandal to touch the Olmert government. Hirschson, an ally of Olmert, faces questioning about alleged embezzlement at a labour organisation he formerly ran. Amid speculation Hirschson might be forced to quit, Nehemia Shtrasler of the daily Ha'aretz, wrote: "The atmosphere in the prime minister's office and the finance ministry is like the last days of Pompeii".

The Olmert government has refused to have any contacts with the new Palestinian ministers, putting it at odds even with the US. A recent poll indicated the Israeli public was sceptical about the government's policy of refusing to deal with the new PA leadership. The poll in the daily Yedioth Aharonoth indicated 56% would welcome contacts with at least some members of the PA, with 39% saying the government should be prepared to talk to Hamas.

Palestinian Factionalism & Hamas Split: Palestinians hope Hamas and Fatah will live up to their deal that the new government would not be involved in talks with Israel, which remain the purview of President Abbas in his capacity as leader of the Palestine Liberation Organisation (PLO). But the politicised way the new government has taken shape and the fact that Haniya met with all factions suggest these hopes will be disappointed.

Haniya's government will not differ significantly from the age-old pattern relied on by the PLO in distributing portfolios on a factional basis. Like its predecessors, the new government will lack professionalism in providing services to the Palestinian people as well as representation based in electoral politics.

Of the 13 factions, only five gained seats in the Palestinian Legislative Council (PLC) elected on Jan. 25, 2006. They are: Hamas (74 seats and four additional ones belonging to independents supported by Hamas); Fatah (45 seats); the Popular Front for the Liberation of Palestine (three seats); an alliance composed of the Democratic Front for the Liberation of Palestine, the People's Party, and the Democratic Union (two seats); the Third Way (two seats, occupied by liberals Salam Fayyad and Hanan Ashrawi); and Independent Palestine (two seats, including former presidential candidate Mustafa Barghouti).

If Hamas and Fatah leave talks with Israel to the PLO and task the new government to deal only with internal affairs, then Haniya should have discussed governmental formation with parties represented in the PLC, as they were chosen by the electorate. But Haniya also approached Islamic Jihad, which boycotted the elections. He also had talks with factions lacking the popular support to win seats in the PLC. And members of the parties represented in the PLC negotiated cabinet seats on an individual basis rather than as representatives of their blocs.

Hamas and Fatah were unable to distribute portfolios according to PLC representation and failed to bring in technocrats with the ability to govern effectively. But Hamas did make an important concession by ceding the Finance Ministry - one of the most sensitive posts in any government - to technocrat Fayyad, as part of an effort to court the US, the EU and Israel. (Hamas previously held that the Finance Ministry must remain in its hands, being the PLC's largest bloc).

Neither Fayyad nor Abu Amr will be able to work professionally now that the government depends on the principle of factional representation. Any factional dispute, especially between Hamas and Fatah, will affect the finance and foreign ministers as well as other cabinet members who try to work independently. (Independents in the PLC had called for a government of technocrats, which was to be protected to some extent from any political contention).

The first crisis the new government will face is Israel's continued detention of 39 PLC members, 35 of them from Hamas. As a result, Hamas has temporarily lost its PLC majority to the benefit of Fatah and other blocs, which is likely to cause Hamas' obstructionism.

On March 7, the PLC ended its first session and was to have begun a new one, requiring new elections for PLC leadership. To overcome the possibility of a clash over the vote as Hamas had temporarily lost its majority, Hamas and Fatah agreed to postpone the PLC's second session for 40 days. The decision, which violated standard parliamentary procedures, proved that factionalism was still the rule over important considerations.

Then comes a split within Hamas. Its Damascus-based leadership under Mesh'al is influenced by Syria and Iran, whereas Gaza-based Hamas is trying to help the new cabinet to administer the Gaza Strip and the mostly Israeli-controlled West Bank. It was Mesh'al who ordered the armed wing of Hamas - the Qassam Brigades - to attack Israel on March 19 by shooting an Israeli civilian near the border with the Gaza Strip. It was the first attack on Israel claimed by Qassam since a shaky ceasefire came into effect in November 2006, and it came as Hamas leaders in Gaza tried to gain international legitimacy for the new government.

Kobi Ohion, 42, an Israel Electric Corp employee, was shot and wounded by a sniper while working at a fuel depot on the Israeli side of the border, north of the Karni commercial crossing point between Israel and the Gaza Strip. Qassam on March 19 said it had fired two mortar shells across the border. On March 19, the Egyptian authorities detained a Hamas militant in northern Sinai who intended to carry out a suicide bombing in Israel.

In his inaugural speech before the PLC on March 17, as he affirmed the Palestinians' "legitimate right" to resist occupation "by all means", Haniya said his new government wanted to consolidate the truce with Israel and expand it from Gaza to the West Bank.

Israeli security officials claim Hamas it is still smuggling weapons and explosives into the Gaza Strip and has built up a well-organised force there, with sniping and infantry units, and anti-tank crews.

The continued rocket attacks on Israel have been attributed to the smaller, more extremist Islamic Jihad and the fringe Popular Resistance Committees, neither of which joined the unity government. The shooting on March 19 coincided with a visit to Gaza by the Deputy Foreign Minister of Norway, Raymond Johansen. His meeting with Haniya was the first by a high-level Western official. The foreign minister of Italy telephoned Haniya to offer his support for the new government.

Miri Eisin, spokeswoman for Israeli PM Olmert, said the March 19 shooting was "a direct result" of Haniya's talk of the right of resistance. She said: "We hope the international community will take note of this government's deeds and words". New Palestinian Information Minister Barghouti acknowledged that "some actions undermine" the new government's efforts and said the goal was a complete ceasefire.

A spokesman for the Qassam Brigades explained the attack as revenge for Israeli actions in the West Bank, saying: "The enemy has been violating calm day and night" and stressing that the "government platform allows for resistance on all forms".

One new cause of Hamas-Fatah friction was the March 18 appointment of Muhammad Dahlan, a Fatah strongman from Gaza, as national security adviser to President Abbas. There has been bad blood for years between Hamas and Dahlan, who led a crackdown against the Islamic movement when he headed the Preventive Security apparatus in Gaza in the 1990s. Salah Bardawil, PLC spokesman for Hamas, called Dahlan a "provocative personality" and accused him of playing a lead role in the recent bloodletting between Fatah and Hamas.

Dahlan, a possible successor to Abbas, has been accused of trying to assassinate Haniya and of unofficially commanding pro-Fatah forces in fierce factional fighting before the unity government was sealed. A Hamas statement on March 19 said: "Hamas sees the step by...Abbas to appoint...Dahlan, a lawmaker, as his adviser for national security as a violation of Palestinian law. The PA president did not consult Hamas or anybody else when he took the decision. We hope that the president will reconsider this decree".