Focus NEWS A NALYS1S Up In Smoke Attack on army post shows failure of Israeli strategy after Gaza pullout. The Israeli army blew up the tunnel used by Palestinian terrorists to attack an Israeli military outpost near Kibbutz Kerem Shalom. Leslie Susser Jewish Telegraphic Agency Jerusalem B eyond the immedi- ate escalation, the Palestinian attack on an Israeli army outpost near the Gaza border June 25 raises serious questions about Israel's security and foreign policies. Right-wing politicians argue that the incident, coupled with months of incessant rocket fire from Gaza on Israeli civilians, shows that the army has lost its deterrent capacity and that it will take a massive, sustained opera- tion in Gaza to restore it. Ehud Olmert's plan for a major unilateral withdrawal from the West Bank also is under fire, with some pundits maintaining that the latest turn of events will further erode public confidence in the prime minister's pullback strategy. The attack left two Israeli soldiers dead and seven wounded. One soldier was kid- napped by the militants. The attack highlighted sharp 56 June 29 a 2006 differences on the Palestinian side. It came just days before Palestinian factions were set to reach agreement on a docu- ment meant to pave the way for negotiations with Israel, and was widely seen as an attempt to tor- pedo the deal. It also raised questions about the limits of power of both Palestinian Authority President Mahmoud Abbas and Prime Minister Ismail Haniyeh. With many splinter militia factions acting independently or taking orders from Hamas' more radical leadership abroad, it raised another fundamental question: Does any Palestinian leader have enough domestic _ clout to deliver on a deal with Israel? Though there had been prior intelligence warnings, the Palestinian gunmen surprised the Israelis early Sunday morn- ing by attacking from the Israeli side and not the Gaza side of the outpost. Eight Palestinian militiamen infiltrated through a recently dug 300-yard-long tun- nel, coming out well inside Israeli territory. They then turned back toward the border, firing at the Israelis who were facing Gaza. Two attackers were killed while the others made it back to Gaza, taking Cpl. Gilad Shalit with them. Israel demanded Shalit's immediate and uncon- ditional release, but the abduc- tors insisted on the release of all Palestinian prisoners under age 18 and all Palestinian women prisoners in Israeli jails — in return merely for information on Shalit. The Palestinian leadership was divided. Abbas, who leads the Fatah movement, ordered a search for the soldier to hand him back to Israel. Haniyeh, of Hamas, also favored a speedy resolution of the crisis. Both realized they had been presented with a chance to win diplomatic points and alleviate international sanctions against the Hamas led-government. Danny Rubinstein, Arab affairs analyst for the Ha'aretz newspa- per, called it "Haniyeh's moment," and suggested that he could make enormous international gains by forcing the militias to release the soldier. But. Haniyeh may not be call- ing the shots: According to Israeli sources, Khaled Meshaal, Hamas' Damascus-based leader, is in control, ordering the militiamen to stick to their demand for a prisoner exchange. Meshaal is strongly opposed to the agree- ment reached Tuesday between Abbas and Haniyeh on a docu- ment that gives Abbas a mandate to negotiate with Israel and calls for restricting terrorist attacks to areas Israel conquered in 1967. Israel's military options in the face of the kidnapping are not risk-free. The government considered three options: a commando operation to free Shalit, a major ground opera- . tion to smash the militias, and the assassination of Palestinian political and military leaders involved in terror. Olmert warned that Israel would target leaders behind ter- rorism,"wherever they were." This was seen as a direct threat to Meshaal and Haniyeh. "This is the essence of the gov- ernment's warning: The blood of Corporal Gilad Shalit is on all your heads, from Prime Minister Ismail Haniyeh down. There won't be a Hamas government in Gaza or Ramallah, and many of its ministers won't be alive if they don't return the Israeli soldier the way he left: on his feet," ana- lyst Ben Caspit wrote in Ma'ariv. For the first few days after the attack, there was an uneasy deadlock. Israel did not want to take any action that might endanger Shalit's life; the Palestinians didn't want to harm him for fear that it would untie the Israeli army's hands. With Israel, the United States and European Union refusing to deal with Hamas, which they consider a terrorist organization, Egypt was leading mediation efforts on Shalit's release. But Olmert warned that Israel would not wait indefinitely for results. Israel massed troops along the Gaza border, threaten- ing a major ground invasion. It also imposed a land and sea blockade on Gaza to prevent Shalit from being spirited out of the territories. According to one report, how- ever, Palestinians were hoping to take Shalit through tunnels beneath the Gaza-Egypt border, an area where Israel has no way to operate. When Israel withdrew from the Gaza Strip last summer, it evolved a new military doctrine based on deterrence rather than occupation. The thinking was that with the occupation of Gaza finished, Israel would have inter-