A sharia statelet in Gaza whose first act upon taking de facto control was to drag surrendering Fatah guards out of a compound and execute them in the street. And a rump statelet in the West Bank where the Palestinian Authority, at least for the moment, seems to have the upper hand. Palestinian president Mahmoud Abbas has dissolved the Hamas-led government, declared a state of emergency and called for early elections.

Hamas refuses to recognise the president's authority to do much of anything and says nothing short of total control of Palestinian territory, followed by the destruction of Israel, will do.

After a series of ceasefires brokered by Egypt and Saudi Arabia . . . the most recent in March, arranging a powersharing agreement between the Islamic radical Hamas and the more secular Fatah . . . the long-dreaded Palestinian civil war is here.

Two years ago the situation looked less pessimistic. Surprising its critics, Israel completed a unilateral pullout from Gaza. Not only of its security forces but the clearance of 21 Israeli settlements there; some had to be forced to leave.

Earlier in 2005 Mahmoud Abbas succeeded Yasser Arafat as president after the first Palestinian election since 1996. Progress towards getting the Israeli-Palestinian peace process back on track seemed possible.

But the development of a strengthened Palestinian Authority into something that looked capable of assuming the role of government of an independent Palestinian state didn't happen. In January 2006, Hamas swept to a 76seat majority of the 132-member parliament, forming a new government and an uneasy partnership with Abbas.

The European Union and the US suspended aid to the Palestinians as long as Hamas remained in charge. Israel decided to withhold tax receipts of more than $500m from going to the Palestinians.

That things could get worse for the 1.8 million Palestinians squeezed into tiny Gaza seemed perverse. Occupied by the Egyptians from 19481967 and the Israelis from 19672005, conditions have steadily deteriorated. Gazans are considered poor cousins by more cosmopolitan, wealthier Palestinians in the West Bank. The Hamas leaders in Gaza studied at Egyptian universities, where they first came into contact with the Muslim Brotherhood.

Now Gaza is cut off entirely and though water and electricity continue to come into Gaza from both Israel and Egypt it won't be enough unless Gaza is resupplied with fuel to generate power locally.

This week sees a series of talks between Palestinians, Israelis and Americans to discuss what, if anything, is to be done next.

Last week the EU foreignrelations supremo Javier Solana seemed to suggest that Europe might back a multinational force to go into Gaza.

The United Nations made some noises about a UN force.

But whatever enthusiasm there was waned when the head of the Islamic Conference warned against what it called outside interference.

Israel seems to have little appetite for attempting to reoccupy Gaza, though ironically some human-rights groups and international lawyers argue that it can't simply walk away from its responsibilities as occupying power.

The most likely scenario seems to be that Gaza will simply be left to Hamas, with a behind-the-scenes struggle to prevent Hamas patrons in Syria and Iran from resupplying it. But given the humanitarian crisis that would soon land on the world's TV screens, it's hard to see for how long that stance will be possible.

The only certain thing is that whatever fleeting hopes there were for a comprehensive settlement leading to a Palestinian state are gone.

The worst irony of all is that just offshore of Gaza, exploration wells for British Gas discovered one trillion cubic feet of natural gas . . . a find roughly the same size as the Corrib field off Mayo. Exploiting it should yield $100m a year for the Palestinians and offer a start for an economy based on something other than foreign aid and bounty to the families of suicide bombers.

Prosperity, like peace, seems further away than ever.