A Year of Transition?

NABLUS, West Bank, Jan. 26, 2007 — -- Tens of thousands of Palestinians poured into the streets of Gaza to celebrate an anniversary few believed they would ever see: the Islamic group Hamas is still running the Palestinian government one year after it took power.

Violence marred today's rally, with more deaths. Hamas and Fatah have been locked in deadly gun battles since December, when President Mahmoud Abbas threatened to hold early elections, seen by Hamas supporters as a coup attempt.

For most Palestinians, there is little to celebrate. They have sunken deeper into poverty, more than 60 people have been killed in factional fighting in the last month, and talks between warring Fatah and Hamas have yet to create a coalition government that would relieve the Palestinian people from the devastating Israeli and U.S.-led boycott.

When Hamas' Mahdi Hanbali ran for office in last year's Palestinian election, he never expected the job to be so tough: a collapsing economy, international aid boycott -- and last month he was kidnapped by political rivals.

Hanbali became the deputy mayor of the West Bank town of Nablus. Aid programs ground to a halt. Hamas still has not paid the full salaries of its 165,000 employees.

"Lots of development projects froze," said Hanbali from his Nablus office, "but they see now we are transparent. They see we're not playing games and now they are coming back with the programs and money."

Hamas has been able to hang on because few in the international community want to see a total collapse of Palestinian society. Money has been slowly trickling back in.

In Nablus, the United Nations is pushing ahead with a $7.7 million program to computerize the municipality. Germany is spending $32 million to build a water treatment plant.

Qatar is paying the salaries of 36,000 Palestinian school teachers. The European Union has donated $450 million to pay health workers. Hamas has also turned to Iran for cash. According to the Hamas government, $400 million was collected from Arab countries.