As the Palestinian Authority (PA) begins to suffer from a shortfall in foreign aid, it seems increasingly clear that the PA's efforts to forge a more assertive diplomatic approach to Israel — namely, through entering into a reconciliation agreement with Hamas and its intention to pursue recognition of statehood at the UN this September — may well prove disastrous. In the case of the Fatah-Hamas reconciliation agreement, which has partially informed the US Congress' recent threat to withdraw the $500 million in US aid promised to the to the Palestinian Authority, the Palestinian Authority stands to lose not only critical sources of aid, but the international credibility they have earned as a result of PM Salam Fayyad's state building efforts since Fatah took control of the PA in 2007.

