Events in the Gaza Strip yesterday again illustrated the volatile nature of relations between Israel and the Palestinians. Optimists could point to the willingness of Hamas to accept a political agreement, which, albeit impli- citly, recognises that there has to be a two-state solution to the present impasse. Pessimists, who are rarely in short supply in this region, asserted that Israel’s incursion into the Gaza Strip in an attempt to rescue the kidnapped soldier, Corporal Gilad Shalit, could lead to an awkward military confrontation that would undermine prospects for co-operation.

As always, both sides of this debate are right and wrong at the same time. The shift in rhetoric from Hamas is potentially significant. What it means in practice is rather more ambiguous. The combined effect of the threat of a referendum on the “peace” proposal backed by Mahmoud Abbas, the President of the Palestinian Authority, and the prospect of the administration run by Hamas being drained of funds does seem to have inspired a repositioning. Whether this is a tactical device or a strategic shift is harder to tell. Hamas itself may not yet know the answer.

For that reason, Mr Abbas would be unwise to assume that he has achieved a victory. He has correctly concluded that his influence depends on whether his internal opponents need him to be plausible. He has a stronger hand to play than it might appear and he should be prepared to press his advantage. The politically astute response at this stage would be to welcome what appears to be a concession by Hamas, but to continue with a referendum. If he does that, his stance will have been directly endorsed by the electorate, an outcome that will be useful if Hamas attempts to “redefine” what it seems to be saying today at some later moment.

No ballot can be held on this or any other subject while Israeli tanks roam across the Gaza Strip. They would not be there, though, had it not been for the seizure of Corporal Shalit. Ehud Olmert, the Israeli Prime Minister, has been at pains to insist that he has no intention of sending back troops permanently to the area that Israel abandoned last summer. He should continue to be that forthright. Israel’s security is best maintained by avoiding an engagement that is costly in human, economic and diplomatic terms.

Mr Olmert cannot, nonetheless, be remotely indifferent to the fate of his kidnapped soldier. Incidents such as these have emotional power in Israel, in part because they are rare. This is the first instance of its kind since 1994. That, in a separate incident, a young settler on the West Bank also seems to have been snatched will fuel the fear that this is a calculated initiative by Palestinian extremists. It is one that Mr Olmert appreciates he cannot allow to become common.

The fate of Corporal Shalit has, therefore, become the litmus test for whether Hamas is serious about political dialogue. If he were to be killed at the behest of Hamas, no amount of hinting that there might be a new moderation in its attitude to Israel will be deemed impressive. If he were to be released, Mr Olmert would have reason to stand back and encourage Mr Abbas to engage Hamas further. These are perilous times — what Mr Olmert intends to be a “surgical” operation could easily become bloody. Yet these are quite simple times too. How Hamas treats Corporal Shalit now is a profound test of its attitude towards all Israelis.