Israeli reaction is of course expected:
Speaking on election night, acting Israeli Prime Minister Ehud Olmert said Israel could not deal with a Palestinian Authority which included Hamas.
"Israel can't accept a situation in which Hamas, in its present form as a terror group calling for the destruction of Israel, will be part of the Palestinian Authority without disarming," Mr Olmert's office reported him as saying.
"I won't hold negotiations with a government that does not stick to its most basic obligation of fighting terror."
The United States and the State of Israel may be adamantly opposed to dealing with a Palestinian Authority government led by a Hamas prime minister and parliamentary majority, but both are going to have to make a decision.
Since the early nineties, when Clinton was busy with Rabin and Arafat, the US and Israel hung their hopes on Arafat and the PLO/Fatah faction as 'moderates' and 'secularists' who were essentially Palestinian nationalists. Unfortunately, Arafat and his cohorts were also self-serving and hardly interested in securing a peace that would benefit the poor souls of Gaza and the West Bank.
Despite this corruption of the PLO/Fatah, the US (Israel gave up on Arafat, but then came back once Abbas took over) took its chances in the hope that Fatah would somehow come around, getting itself cleaned up and able to govern. This never happened.
In the meantime, Hamas may be a terrorist organization beyond the Occupied Territories, but in places like Gaza, Hamas maintains order, it runs medical clinics and schools, it provides the basic needs for living for a lot of poor people who have nowhere else to turn.
Now honestly. You're poor, you're hungry, you and your kids are living in a refugee camp. Are you going to vote for the guys who've been lining their pockets with aid money for over a decade or are you going to vote for the guys who've built the school and the clinic and provided clean drinking water?
So we have the decision. The US and Israel can either shut down all negotiations and completely ignore Hamas. Or they can figure out a way of communicating because I am willing to guess that the same thing that happens all the time around the world after elections is what may very well happen to Hamas. People start to actually govern for the first time and suddenly the whole worldview changes.
They played the game with Arafat and this is how it turned out; the US and Israel have to find a way to go forward.