Hamas is negotiating with Israel. This is what Palestinian Authority President Mahmoud Abbas confidently said to a BBC -Arabic reporter in an exclusive interview. How does he know? Abbas asserted that there are "no secrets in Israel".

If things could only be this simple in the Middle East, Mr. Abbas would have known from the get-go that the Oslo Accords were a disaster for the Palestinians, Bush's Road Map for Peace was just another road to nowhere, the Annapolis Peace Conference was dead on arrival, and Obama's promises for "change" do not mean squat when it comes to Israel.

The President of the Palestinian Authority added that the presidential and legislative elections scheduled for January will be postponed and that he would not seek a second term as president. Abbas looked frustrated...he looked like a beaten man.

Meanwhile, the Israeli government in recent days has been scrambling for yet another distraction to offer to the beleaguered Palestinian Authority President: an interim accord that would include a Palestinian state with provisional borders. This way he'll have a quasi-state with temporary borders to show for all the endless negotiations. What a brilliant idea!

The reasoning behind this brilliant idea is that it would remove contentious issues that have prevented an agreement in the past, such as the Palestinian refugee issue and Jerusalem, from the negotiating table. No big deal, really!

This is starting to sound like another chapter from One Thousand and One Nights.

In another development, the Israeli government has recently approved the construction of 900 new housing units in Gilo, a Jewish neighborhood built on lands captured by Israel in 1967. The announcement has caused an uproar in the international community and has drawn sharp criticism and "dismay" from the White House.

But in another brilliant idea, according to the Jerusalem Post, in order to lure the PA back to the negotiating table, in private discussions, the Israeli Prime Minister Benjamin Netanyahu has made clear he was prepared for a moratorium on new settlement construction, as long as it did not include Jerusalem and did not preclude construction of public buildings needed for normal life in the settlements.

Translated, this means construction will continue as usual in E. Jerusalem along with expanding current Israeli settlements.

Meanwhile, with all this happening, media reports have been surfacing that a final deal has been reached for the release of captured Israeli soldier Gilad Shalit. Some Arab media outlets have been reporting that Shalit might be released as early as the Muslim Eid holiday in exchange for 1000 Palestinian prisoners. Should this happen, it will be a major victory for Hamas and another blow to Abbas.

Last month Hamas handed Israel a video of Shalit in exchange for 20 female Palestinian prisoners; something that was widely seen as a major victory for the organization by many Palestinians.

According to a poll published in Haaretz, 57 per cent of Israelis support the idea of talking with Hamas. The poll was taken in the wake of a statement by former defense minister Shaul Mofaz, who last week unveiled a plan that includes negotiations with Hamas and an interim Palestinian state on 60 percent of the West Bank in a year.

"If Hamas would be elected and would want to negotiate and accept the Quartet's conditions, from that moment, it is no longer Hamas", said Mr. Mofaz. He also added, "Responsible leadership in Israel would sit with those who changed their agenda".

So if Hamas is no longer Hamas, and the Palestinian Authority is no longer an authority, what options do the Palestinians have?

To be continued on another night...

This article was originally published on the Huffington Post.

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