(Agencies)
Updated: 2007-12-03 10:02

GAZA CITY-- Hamas is casting a long shadow over Israeli-Palestinian peace talks.

Although weakened by harsh economic sanctions and feeling more isolated after last week's Mideast peace conference in the US, the Islamic militants retain a tight hold on Gaza and have the power to disrupt future negotiations with increasingly deadly rocket attacks on Israel.

The Israeli, Palestinian and US leaders haven't let on whether they'll confront, co-opt or try to ignore Hamas, while deepening divisions between ideologues and pragmatists make the group more unpredictable.

For now, the hard-liners who led the violent takeover of Gaza in June are still in charge, blocking any move toward compromise.

In an interview, their spokesman, Sami Abu Zuhri, dismissed the Mideast conference at Annapolis, Maryland, which relaunched peace talks after seven years of bloody deadlock, as a meaningless ceremony.

He shrugged off the participation of more than a dozen Arab states, including Hamas' main Arab ally, Syria, as a sign of Arab weakness under US pressure. Hamas is more pivotal than ever, he insisted.

"Simply, no party can dictate its program on the region without Hamas," he said.

But another senior Hamas official, representing the pragmatic wing, said the group was caught off guard by the heavy Arab turnout at Annapolis and feels increasingly sidelined. He spoke on condition of anonymity because his views contradict the official line.

Hamas is already being shunned by much of the world because of its violent ideology, rejection of peace talks and call for the destruction of Israel. It has had trouble providing even basic services, mainly because of the near complete closure of Gaza's borders by Israel and Egypt. One Arab diplomat said he expects Hamas to run out of money by the summer.

For now, though, Hamas' rule over Gaza's 1.5 million people appears unshaken.

Hamas has disarmed its rivals in the Fatah movement of Palestinian President Mahmoud Abbas and silenced most dissent. After a Fatah protest rally of a quarter of a million people in mid-November, Hamas arrested hundreds and threatened others with retribution if they demonstrate again.

Many have heeded the warning, including 34-year-old Alaa, a member of Abbas' once powerful Preventive Security Service. Alaa, who would not give his last name, said his Hamas jailers shaved his head after the Fatah rally. He pointed to his mark of humiliation a light fuzz just beginning to grow back and said he won't criticize Hamas in public anymore.

With Hamas showing no signs of fading quietly, the US has tried to isolate the group as it brokers a peace deal. Once a Palestinian state is achieved, "the Palestinians in Gaza are going to have to make a choice" whether to join, Stephen Hadley, President Bush's national security adviser, said recently, explaining the phased approach.

Meanwhile, the international community is trying to boost Abbas in the West Bank. Donor countries are expected to approve large sums of aid for the Palestinian president to distribute, while Gazans face a further slide into poverty.

"What the Americans will strive for in this situation is real improvement in the West Bank and real deterioration in Gaza," said Mouin Rabbani of the International Crisis Group, an independent think tank.

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