The Palestinian president's decision last week to defer a vote on the UN Human Rights Council's report on war crimes in Gaza -- the Goldstone investigation -- has thrown an increasingly complex and ugly situation into relief. It has left Arab and Palestinian parties at a loss what to do next, and thrown a spotlight on accumulated mistakes that long ago saw the peace process deviate from the legitimate aspirations of the Palestinians. Arab League Secretary-General Amr Moussa pronounced that process dead three years ago, a contention that provoked not even whispered objections from the organisation's 22 member states. Moussa made his comments during Israel's vicious war on Lebanon in the summer of 2006. Yet the Arabs continued to cling to their Peace Initiative, proposed in 2002, offering full normalisation between Arab states and Israel in return for the latter's withdrawal to its 1967 borders. Since then Israel has quashed the second Intifada, launched a brutal war on Lebanon, and in January embarked on its assault against the already besieged Gaza Strip. It has consistently refused to comply with any of the agreements it signed with the Palestinians and has continued to expand its land grab policy and routinely assassinate Palestinian resistance figures. Today the Palestinian question is so tattered it is barely recognisable. It is no longer about the liberation of occupied land. The Fatah- Hamas war -- let us not forget the role of the Bush administration and Israel in backing Fatah against its rival -- has come to dominate the scene, evolving within three years into a seemingly intractable predicament. It would be a mistake to assume this is simple rivalry between two factions fighting over power. What we are witnessing is the clash of two very different projects for Palestine, a battle between resistance versus submission, both of which have been warped by a peace process gone wrong. This week Fatah and Hamas leaders launched diatribes against each other because of the Goldstone Report. The fall out from their outbursts inevitably affected the Egyptian sponsored inter- Palestinian reconciliation agreement both parties were due to sign on 25 October. But what is now clear is that the Goldstone Report was only a trigger, and not the cause, of this new round of recriminations. Equally clear is that reconciliation is no political nicety, but a prerequisite for the political survival of both Hamas and Fatah. Hamas needs it to open the Rafah border, to ensure that it is included in a unity government in both Gaza and the West Bank, and to delay the January elections till June. Fatah, conscious of its waning popularity in the West Bank, knows it cannot hold separate, fair elections and win, even if this is what Palestinian Authority President Mahmoud Abbas threatened to do last Sunday. Cairo, too, needs reconciliation to protect its north-eastern borders and ensure Gaza is not separated from the West Bank, leaving Egypt burdened with responsibility for the Strip. It is for this complex of pragmatic reasons that the Cairo- sponsored pact will be signed, sooner or later. National unity is nowhere in the equation.