Tony Blair brings to his job as the international community's Middle East envoy the instinctive optimism that was his hallmark as Britain's prime minister...

..."Having a state is not just a question of territory," Mr Blair insisted in an interview with the Financial Times. "It is about the nature of what happens inside the state . . . So the single most important thing I can do to help the Palestinians is tell them the truth. And the truth is that there will not be a [Palestinian] state unless the nature of that state is clear."...

...Critics say there is much wrong with Mr Blair's strategy - not least the exclusion of Hamas and the international community's failure to commit Israel to stopping all Jewish settlement expansion. There are also fears that backing one Palestinian faction could exacerbate internal divisions and set the stage for a Palestinian civil war.

But Mr Blair did not believe in engaging Hamas. He stressed that the Islamist group could only be brought into negotiations once it recognised Israel and renounced violence.

...When the second intifada erupted in September 2000, it was also because many Palestinians had nothing to lose. Instead of establishing industrial zones to provide jobs for many unemployed Palestinians, Arafat established a casino and bought luxury vehicles for his loyalists. Instead of building housing projects for the needy, Arafat gave his wife a monthly allowance of $100,000 to support her shopping sprees in Paris.

To cover up for the rampant corruption and mismanagement in the PA, Arafat unleashed a wave of incitement against Israel and the West, especially in the media and mosques. This is the Arab dictators' way of diverting attention from the real problems at home - by keeping their peoples busy hating the West and Israel.

It's estimated that Arafat's PA had received nearly $6.5b. in international aid. A former Arafat aide once admitted that had most of the money been invested for the welfare of the Palestinians, it's most likely they would not have resorted to violence in September 2000 or voted for Hamas six years later.

Plans to reform the PA have been surfacing since Salaam Fayad was first appointed as finance minister in June 2002...

...This money is mainly designed to keep Fatah in power and prevent Hamas from taking over the West Bank. And unless the PA changes its rhetoric and starts promoting real peace and coexistence with Israel, the millions of dollars are not going to create a new generation of moderate Palestinians.

Israel's security measures, including movement restrictions and closures, are also not helping to boost the standing of the moderate camp.

The only way to undermine Hamas is not by channeling billions of dollars to the PA leadership, but by offering the Palestinians a better alternative to the Islamist movement. In order for Fatah to regain the confidence of the Palestinian public, it needs to reform itself and pave the way for new faces. The tens of thousands of Palestinians who participated in the Hamas anniversary rally over the weekend should have sounded an alarm bell in Paris and Ramallah, namely that the Islamist movement continues to enjoy massive support despite economic sanctions imposed on the Gaza Strip.