Senior sources in the defense establishment say that the Egyptians are even willing to agree, albeit belatedly, with the Israeli-American conclusion that nothing good will result from Cairo's effort to mediate between Hamas and the Palestinian Authority. The Obama administration fears that intra-Palestinian reconciliation would only bolster Hamas at the expense of Palestinian President Mahmoud Abbas and his Prime Minister, Salam Fayyad.
Palestinian unity has been understood to mean that a joint government would involve Hamas and that would also present the United States with a constitutional problem.
Legislation passed in Congress would prevent the administration from continuing to give aid to the Abbas-Fayyad government the minute it agrees to include Hamas as a partner. Cairo will not admit it publicly but it appears that its reconciliation initiative is dead.
An Egyptian source says that the mediation efforts stopped because "conditions in the area do not permit it." The source said that the Hamas rejection of an Egyptian compromise proposal, in part because of pressure from Iran and Syria, is preventing progress toward reconciliation.
On the other hand, the Egyptians are now trying to push for the resumption of peace talks between Israel and the PA, even by indirect American mediation.