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When U.S. Secretary of State Condoleeza Rice returns to Israel she will exercise the official U.S. position: contact will still be made with non-Hamas moderates in the Palestinian Government, like finance Minister Salam Fayyed, Foreign Minister Ziad Abu Amr, and the Palestinian President Mahmoud Abbas.

Although the president is elected separately and operates outside the Palestinian Government coalition, Abbas has agreed to the Unity Government. In doing so, he has become a representative of the majority in the Palestinian Parliament, which is Hamas.

There are a couple of counterpoints to this statement. The reason the West will still speak with Abbas is because of his chairmanship of the PLO — the Palestine Liberation Organization created by Yasser Arafat — which is still the umbrella organization over the Palestinian government. Any big agreement, like a peace deal, can be taken to a referendum bypassing the Hamas-controlled government.

But any moves made in the short term, whether they involve the easing of travel restrictions or the release of the kidnapped Israeli soldier, will need the approval of the government. Regardless of the fact that Hamas politicians stumbled into power, surprising even themselves when they won, they’re there. Prime Minister Ismayel Haniya will give the thumbs up or thumbs down to any changes in the territories. It’s not even clear if Haniya gets the last word. The exiled political chief of Hamas, Khaled Meshall, makes many of the decisions from his office in Damascus, and even he answers to a Muslim shura (council of religious leaders.) All that’s really clear is that Abbas is Fatah, and Hamas has the votes in Parliament.

Hamas also has the military might. Their weapons are superior to those of the Palestinian Security forces, members of which are primarily Fatah. U.S. security coordinator, Lieutenant General Keith Dayton, told senior members of Congress that Iran is now helping Hamas acquire weapons at a much faster rate than the forces loyal to Abbas.

With their superior firepower, Hamas was able to turn the international financial boycott of the government into chaos and ultimately a greater hold on the population. No one was willing to let the Palestinians starve. So, aid not only continued to flow into the aid dependant territories — it increased: $1 billion in aid from 2005 rose to $1.2 billion in 2006. All that changed is that the aid went directly to the aid organizations, not through the government.

Therefore, the only people whose suffering is enhanced are the government employees who don’t receive their paychecks. The sweet bit of irony is that in the years of Fatah rule under Yasser Arafat, everyone who got a government job was a Fatah loyalist or a buddy thereof. Now Hamas is sticking it to them in their wallets. Can Hamas members endure the financial blockade? They love it.

You probably saw repeated images of the desperation of those cash poor government employees, spilling over into street clashes between Hamas and Fatah. Hamas used these images when the two sides sat down in Mecca to draw up this agreement for the Unity Government. Hamas compromised on nothing. They met none of the three benchmarks demanded by the international community. They refuse to recognize Israel. As for renouncing violence, Haniya said, “Resistance against the occupation, in all its forms, was the legitimate right of all Palestinians.”

Israel interprets that to mean that the bus bombings and Qassam rocket attacks get the OK of the government. And when it came to honoring interim deals reached in the past between Israel and the PLO, Hamas promised only to “respect” them. The language is weak enough to allow Hamas to wiggle out of any deal the leaders don’t like.

Yet, during the negotiations, Hamas leaders stressed the need for a compromise solution to end the Palestinian on Palestinian bloodshed, which killed about 100. When they didn’t get the deal they liked, gunfire echoed in the alleys and blood flowed in the streets. Ultimately Fatah bent and the Unity government was formed.

There was speculation that the kidnapped Israeli Corporal Gilad Shalit would be released as a good faith gesture when the government was formed. But in the days leading up to the finalization of the government, Palestinian Information Minister Mustafa Barghouti told me that Shalit will only be released as part of the prisoner swap Hamas is demanding.

Now, the world community is beginning to bend. Israel may soon stand alone with its hard line stance shunning the unity government. Even that is hard to define as hard line, since contact will be maintained with Abbas. EU Foreign Policy Chief Javier Solana recently received a letter pushed by the Pro-Israel lobbying group AIPAC and signed by more than half of the U.S. House of Representatives. It urges Europeans not to soften the boycott on Hamas. “We believe there must continue to be restrictions on American, European and international aid,” it read. But that position and the financial blockade itself is crumbling.

Non-EU country Norway was the first to drop all sanctions, re-start the flow of aid, and even send a representative to meet with Haniya. German Development Minister Heidemarie Wieczorek-Zeul called on the international community to talk to the Government. For weeks Russia has advocated an end of the blockade. Belgium’s Foreign Minister Karel De Gucht met with Foreign Minister Ziad Abu Amr. A senior U.S. diplomat met with Finance Minister Salam Fayad. Like the U.S. the EU is adopting the policy of contact with Non-Hamas Ministers, even though they ultimately answer to the Hamas majority.

Hamas did give up 14 seats in the government to independents, and even their rivals in Fatah. But in the end they didn’t give up an inch of their platform. They didn’t moderate. Through that lack of compromise Hamas solidified its power and created a mechanism for the world to establish contact with a government controlled by a party on the U.S. State Department list of terrorist organizations.

Mike Tobin is a foreign correspondent for FOX News Channel based in Jerusalem. You can read his bio here.

Michael Tobin joined FOX News Channel (FNC) in 2001 and currently serves as a Chicago-based correspondent.