Jed -- it's true: they chose poorly. But (to mix gambling metaphors) the Russian roulette of letting the Palestinians pick their own horse and allowing the chips to fall where they may has its own mad logic to it. In a world of rotten policy options, forcing the issues of terror and chaos by legitimizing a process that votes terrorists into power continues the idea behind unilateral Israeli withdrawal: you want a state? Here -- make one.
A Palestinian Authority under Hamas may be a squalid monster of a semi-state, but it will be increasingly held to account as a would-be legitimate real state with a freely elected government. This could mean a lot of things -- including the cutoff of funding -- but what it does mean for sure is that raising the stakes by legitimizing the Palestinian vote, whatever its outcome, boldly bets on the wisdom of putting responsibility for their actions as a would-be state in their very own democratic hands.
Is that bet the synergy of neoconservatism and realism? Yes.
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