The mass break-out of some 700,000 Palestinians from Israel’s open-air prison at Gaza has profoundly changed the political landscape of the Middle East. In magnitude, it can be compared to the impact on Europe of the fall of the Berlin Wall. Nothing will be the same again. There can be no return to the past.

All the main actors in the drama — Israel, Egypt, the Palestinian Authority, Saudi Arabia, the European Union and the United States itself — will have to rethink their policies in the light of new realities.

Israel’s Prime Minister Ehud Olmert (R) stands across from Palestinian President Mahmoud Abbas during their meeting in Jerusalem January 27, 2008, REUTERS

The most striking of the new realities is that the 1.5 million inhabitants of Gaza — who had been reduced to abject misery by Israel cruel siege — will never again accept being locked up. Gaza must be allowed to breathe, to trade, to be supplied with the basic necessities of life, and to live normally.

If Egypt, under Israeli and American pressure, were to attempt to bottle up the Gazans once more, this could trigger riots in Cairo, which could destabilize President Husni Mubarak’s regime. Egypt must now walk a tightrope between Israeli and American pressure and the new reality of its relations with the Gazans.

The whole question of Gaza’s relations with the outside world must now be reviewed. Israel can no longer dominate and control every aspect of Gaza life — its airspace and territorial waters, its imports and exports, its taxation system, and all movements in and out of the territory.

As Israel’s role shrinks, Egypt’s will expand. The situation in Gaza provides Egypt with a major opportunity. If it conquers its fears and acts boldly — if it refuses to be cowed by Israel and the United States — it has a chance to recover the leadership of the Arabs. With some vision and imagination, Egypt could demonstrate to the world what can be made of Gaza and its people, once they are allowed some freedom.

Egypt must negotiate control of the Rafah crossing directly with Hamas. It can no longer afford to be complicit in Israel’s siege of Gaza. Its own Egyptian public opinion, as well as Arab opinion as a whole, will no longer tolerate it. But it needs to go further than that.

Egypt has to be Gaza’s advocate with the international community. Gaza’s infrastructure, shattered by Israel, needs to be rebuilt. Its port and airport need to be brought back to life, and reopened for business. Egypt could benefit commercially, because Gaza is a considerable market. Egypt could also benefit politically, because helping Gaza rise from the dead could draw the poison from President Mubarak’s conflict-ridden relations with the Muslim Brotherhood, who are his regime’s major domestic opponents.

Saudi Arabia also has a major role to play because of its moral and political authority and its immense financial resources. Arab money will be needed to restore Gaza to health. Egypt and Saudi Arabia must work together to mediate the paralyzing feud between Hamas and Fatah, and unite Palestinian ranks.

They must persuade Europe and the United States — and a reluctant Israel — that if Arab-Israeli peace talks are to get anywhere Hamas must be included. Having broken out of physical isolation in Gaza, Hamas’ political isolation must now in turn be ended. There can be no forward movement in the region towards either peace or security without engagement with Hamas.

This is bad news for Mahmoud Abbas, president of the hapless Palestinian Authority and his Prime Minister Salam Fayyad. They had hoped to show that their talks with Israel could yield results. But they have failed to secure the removal of a single West Bank checkpoint or the dismantling of a single illegal Israeli outpost, let alone progress with the core issues of borders, Jerusalem and refugees.

A Palestinian woman crawls through the border wall between Egypt and Gaza Strip in the town of Rafah January 26, 2008.

The boycott of Hamas — imposed by Israel and the United States and accepted by the cowardly Europeans after Hamas won the democratic Palestinian elections of January 2006 — was an act of political folly. It can no longer be sustained. That E.U. diplomats cannot speak directly to Hamas is an absurdity that should immediately be corrected.

On a visit to Paris last week, Israel’s Defense Minister Ehud Barak mouthed the old bankrupt thinking, thereby doing his reputation no service. He told Le Figaro (January 26-27): “We have nothing to say to Hamas. We speak to them when we interrogate them in our prisons.” The world knows what Israel’s “interrogations” are like. Barak is the prime architect of the policy of attempting to starve Gaza into submission. This policy has failed.

Israel has suffered a major political and strategic defeat. Its collective punishment of a whole Arab population has backfired. The Palestinians have not surrendered, but continue to resist. Israel’s image has been badly damaged and its policies widely denounced as cruel, immoral, and a blatant violation of international law.

In strategic terms, Israel’s deterrent posture, on which it sets such store, has suffered a blow vis-à-vis Hamas, much like the blow inflicted on it by Hizbullah in the 34-day Lebanese war of 2006. These two non-state actors — Hamas and Hizbullah — are challenging Israel with asymmetric warfare on two fronts. Their message is simple: If you hit us, we will hit you.

Israel’s pre-eminence has been dented, but its military and security establishment, obsessed with the outdated notion of military superiority over the whole region, refuses to accept it. It still believes that the Palestinians will give up the struggle if enough of them are killed.

In the two years 2006 and 2007, Israel killed over 800 Palestinians, including 126 children, maimed and wounded thousands of others, and smashed a whole society by its repeated incursions, raids, and targeted assassinations. This month alone it has killed over 60 Palestinians. The disproportion with Palestinian action is striking: Since 2004, only eleven Israelis have been killed by Palestinian rockets fired from Gaza.

Hamas has repeatedly offered Israel a long-term truce of twenty years and more, but on condition that Israel renounces violence and that the cease-fire be extended to the West Bank as well as to Gaza. Hamas also insists that Israel open the border crossings and release Hamas parliamentarians from prison.

In other words, Hamas is seeking a mutual ceasefire and a truce based on something like a balance of power — or a balance of terror. Israel’s leaders are far from ready to accept such terms. They still harbor the illusion that Palestinian nationalism can be crushed by brute force, much as they believe that Hizbullah, too, can in due course be disarmed and destroyed.

Several prominent Israelis have joined in the outcry against their government’s policies. They include Jessica Mantell, executive director of B’Tselem, the Israeli information center for human rights in the Occupied Territories, and Jeff Halper, coordinator of the Israeli Committee against House Demolitions.

Halper wrote last week: “The desperate people who surged into Egypt… deserve the respect and gratitude of every person who cherishes a better world based on human rights and dignity. As an Israeli Jew, I have been saddened and mortified that my own people, after all they have experienced, cannot see what they are doing to others.”

John Dugard, the U.N. Special Rapporteur for Human Rights in the Palestinian Territories, has described Israel’s actions in Gaza as a “serious war crime,” for which its political and military officers should be prosecuted and punished.

Only a sincere and serious effort to make peace with all the Palestinians — Hamas as well as the Palestinian Authority — on the basis of the 1967 borders and a shared Jerusalem can ensure Israel’s long-term security. Unfortunately, there is no sign that this obvious truth has dawned on either the Israeli leadership or Israel’s hawkish American friends.

Patrick Seale is a leading British writer on the Middle East, and the author of “The Struggle for Syria;” also, “Asad of Syria: The Struggle for the Middle East”; and “Abu Nidal: A Gun for Hire.” Copyright © 2008 Patrick Seale