It might have been easy, amid the raucous cheering at Prime Minister Benjamin Netanyahu’s Capitol Hill pep rally on Tuesday, for Israelis to ignore President Obama’s earlier warning of a gathering storm on Israel’s horizon. But Wednesday’s announcement that Egypt plans, on Saturday, to effectively end the siege of Gaza by permanently opening the Rafah border crossing brought home the harsh truth of Israel’s increasingly isolated position. (Obama, the same day, got a non-commital response from Prime Minister David Cameron in London when urging Britain to join the U.S. in opposing a September U.N. vote recognizing Palestinian statehood.)

Obama, in his Sunday speech at AIPAC, had warned Israel that the wave of democracy reshaping the Arab world meant that that “a just and lasting peace can no longer be forged with one or two Arab leaders… millions of Arab citizens have to see that peace is possible for that peace to be sustained.” While the U.S. would stand by Israel unconditionally, Obama warned that “the march to isolate Israel internationally — and the impulse of the Palestinians to abandon negotiations –- will continue to gain momentum in the absence of a credible peace process and alternative.  And for us to have leverage with the Palestinians, to have leverage with the Arab States and with the international community, the basis for negotiations has to hold out the prospect of success.”

The “basis for negotiations” offered by Netanyahu on Tuesday won’t reverse the growing Arab and European skepticism of the prospects for success in U.S.-led negotiations. Wednesday’s Egyptian announcement on Gaza seemed to underscore Obama’s point. Gone is President Hosni Mubarak, whose own animus towards Hamas (the offspring of his domestic nemesis, the Muslim Brotherhood) made him an enthusiastic backer of the U.S.-Israel strategy on Gaza. Mubarak, as Obama implied, never represented the will of his people, and even before they elect a government certain to be tougher on Israel, an interim military leadership more heedful of public sentiment made clear it could no longer sustain the blockade.

But the siege strategy had failed long before this week. Its purpose had been not simply to prevent arms from entering the territory, but to topple Hamas. And it effectively achieved neither. From the moment the Islamist movement won the Palestinian legislative elections in January 2006, Israel — with the support of the U.S. — began to restrict Gaza’s economic lifeline to the outside world. And after Hamas expelled security forces loyal to Fatah in a violent power struggle in 2007, Israel tightened the noose. The plan was to deprive Gazans of many basic commodities — not starving them, but “putting them on a diet” in the memorably callous explanation offered by a senior Israeli official — in hopes that imposing a twilight existence on the territory would turn the civilian population against Hamas. Banned items ranged from basic construction materials to coriander, sage, ginger, A4 paper, notebooks, toys, pens and pencils, seeds and nuts, livestock, fishing nets and a host of other commodities with no plausible military use.

Thei siege continued regardless of whether Hamas was firing rockets or observing a ceasefire and even restraining rival groups from doing so. But Hamas survived not only the siege, but also the heavy military blows of Israel’s Operation Cast Lead, that left more than 1,200 Palestinians dead in early 2009. Indeed, the movement’s own authoritarian style may have done more to weaken its support among Gazans than any of the U.S.-Israeli pressures. The U.S. and its allies had begun making clear to the Israelis that their attempt to throttle economic life in Gaza was untenable — Senator John Kerry had to plead with the Israelis to allow pasta in to Gaza in February 2009. But it took the  confrontation with the Turkish aid flotilla to finally force Israel to ease the terms of the blockade. As I wrote at the time,

…the joint strategy adopted four years ago by the West, Israel, the moderate Arab regimes and Fatah to isolate Hamas and force it out of power has not only failed to achieve its objectives but has ceded the initiative to others to set the regional agenda. Turkey played a leading role in the flotilla, reiterating its newfound independence from the U.S. on regional issues — and its willingness to challenge Washington and Israel. In doing so, Turkey is channeling the overwhelming majority of public opinion throughout the region and highlighting the fact that rather than Hamas, it is the Arab governments that have cooperated with the U.S.-Israeli blockade strategy that are increasingly isolated and under pressure to distance themselves from the siege. Easing the blockade may relieve some of the immediate political pressure, but it’s a decision that affirms that the U.S.-Israeli-Arab strategy to write Hamas out of the Palestinian political equation is in deep trouble.

Needless to add, that trouble has only deepened. The strategy to marginalize Hamas had always been a long shot, but absent a peace offer from Israel to Abbas that Palestinians might deem credible, it was stillborn.

Hamas and Fatah, under pressure from their public, have, in fact, signed a reconciliation deal under Egyptian guidance. There’s no clarity yet on the security arrangements that will be adopted at Rafah, but it’s clear that the Egyptians are working to integrate Hamas into a framework aimed at ensuring a measure of stability. President Abbas insists that the unity government will recognize Israel and existing treatise, and refrain from violence, as Israel and the West have demanded of Hamas. Former Israeli ambassador to Egypt, Eli Shaked saw a positive side to the Rafah opening, telling the Wall Street Journal, “This is a kind of reward for Hamas behaving according to Egyptian expectations. This is also a kind of leverage over Hamas — an attempt to tell them they have a lot to lose if they misbehave.”

Other Israeli commentators have noted that Egypt’s move would actually lift international pressure on Israel over the blockade, and point out that the tunnel system had allowed militant groups to move men and materiel into Gaza even when the blockade was in place.

There are clear shifts under way in Hamas, and major strategic debates over whether to move towards a two-state solution. The Egyptian authorities, no doubt, hope to integrate Hamas into structures of Israeli-Palestinian coexistence, and encourage a more moderate direction, at the same time as acknowledging the reality that the U.S. and Israel have long tried to evade — that no peace can be achieved without the consent of Hamas. The Egyptians know, as do many senior Israeli securocrats, that their security interests, whether it be the release of captive soldier Gilad Shalit or the maintenance of a cease-fire along Israel’s southern flank require pragmatic cooperation, and even negotiation, with Hamas.

So, while Netanyahu warns that Abbas choose between him and Hamas, that’s a framework Abbas — and the region — has effectively abandoned. Given the limits on what Netanyahu has been willing to offer him thus far, it’s hard to see him being tempted to reverse his pact with Hamas.  The Egyptians, in fact, are effectively laying out post-Mubarak terms of engagement that will be more favorable to the Palestinians. A rude awakening for the Israelis, to be sure, but perhaps simply  a precursor to what could happen in September, when President Obama’s best efforts may not be enough to prevent the UN General Assembly specifying that the West Bank, Gaza and East Jerusalem belong to a Palestinian state with which Israel will have to find peace.