The biggest gains in the Gaza war have gone to the hardliners on both sides. Hamas is declaring victory, while Israel's leading hawk is the front-runner in elections just over a week away.

But a new phase in peace efforts has opened with Barack Obama's election as US president and the international community may find itself offering Hamas incentives to moderate rather than shunningit.

Hamas is exulting in the widespread support it

received in the Muslim world and many Western countries. Israeli public opinion has emerged tougher and more inclined to choose Benjamin Netanyahu over the more dovish candidates.

Israeli strategists say the offensive, mounted to halt rocket fire on Israeli settlements and cut the flow of arms to Hamas, has dealt the militants a heavy blow. But it has not yet led to a permanent arrangement that would stop Hamas weapons smuggling and rocket attacks, and fighting could erupt again at any moment.

The crippling international blockade imposed on Gaza's borders with Israel and Egypt has failed to oust Hamas since it seized control in June 2007. And the Israeli onslaught that killed nearly 1,300 Palestinians has not seriously hampered its ability to rebuild itself. The tunnels through which it gets its arms are still operating.

Meanwhile, Palestinian moderates led by President Mahmoud Abbas have been discredited, along with their US-backed policy of reaching Palestinian statehood through negotiations.