Palestinian Prime Minister Rami Hamdallah met Monday the U.S. Special Envoy to the Middle East Jason Greenblatt in West Bank city Ramallah, urging the U.S. to pressure Israel over settlements. According to a statement by the PM's office, the meeting tacked the issue of the national reconciliation as well and the latest efforts by U.S. President Donald Trump to revive the peace process between Palestine and Israel.

Hamdallah stressed that the main obstacle in the path of the peace process is the Israeli occupation and settlement expansion, which he described as destructive to the two state solution and the establishment of a geographically continuous Palestinian state. He urged the U.S. administration to pressure Israel to allow the Palestinian government to work freely in the territories classified as Area C in the West Bank and stop settlement activities in the occupied West Bank.

Under the interim Oslo Accords signed between the Palestine Liberation Organisation and Israel in 1993, the West Bank is divided into three zones: A, B and C, with area A under Palestinian control, B under Israeli security coordination and Palestinian administrative control, and C under full Israeli control.

The Israeli settlement construction is one of the top and most complicated issues in Palestinian-Israeli negotiations. The peace talks between Palestine and Israel have been stalled since April 2014. The U.S.-sponsored talks that lasted for nine months achieved no tangible results.

Usually the U.S. and Israel are on the same page when it comes to reconciling the two rival Palestinian factions, Hamas and Fatah. Until Hamas renounces terror and disarms, both Washington and Jerusalem have opposed its integration into the Palestinian Authority.

That's why it's important that the reaction from the U.S. and Israel was so different Thursday to news of the latest Hamas-Fatah unity deal. Prime Minister Benjamin Netanyahu, in a statement on his Facebook page, did not mince words: "Reconciling with mass-murderers is part of the problem, not part of the solution. Say yes to peace and no to joining hands with Hamas."

Compare that with State Department spokeswoman Heather Nauert: "We would welcome the effort for the conditions for the Palestinian Authority to fully assume responsibilities in Gaza. We see that as potentially an important step for getting humanitarian aid in there. We are going to watch these developments closely."  

A unity Palestinian government would potentially mean a designated terror organization, Hamas, could receive international aid, a much needed lifeline for a group under intense pressure from Egypt and Israel. At the same time, the agreement would allow the Palestinian Authority to re-enter Gaza, a territory that has been under Hamas control since it seized power with its militia in 2007.   

At first glance, the different reactions from Israel and the U.S. looks like a return to the fraught relationship under President Barack Obama between the two allies. But there is more going on. Both U.S. and Arab diplomats told me that Israel has been briefed on the status of Hamas-Fatah negotiations since they began over the summer and privately has not objected in the same harsh tones as Netanyahu's statement Thursday.

This time the reconciliation agreement was brokered by one of Israel's allies, Egypt. Under President Abdel Fattah el-Sisi, Egypt and Israel have quietly cooperated against Hamas and more extreme terrorist groups in the Sinai. El-Sisi has also applied considerable pressure on Hamas, instructing his military to destroy the underground tunnels between Gaza and the Sinai and closing the border between the two countries until August. Egypt brokered the last attempt at reconciliation in 2011, but back then the relationship with Israel was far less robust.  

The new deal also comes as the United Arab Emirates, another moderate Sunni Arab Gulf state, is making a bid to replace Qatar as a major donor in Gaza for humanitarian aid and infrastructure improvement. The representative of Fatah in the Cairo reconciliation talks was Mohammed Dahlan, a former Palestinian Authority security chief who has been living in the Emirates in recent years.

Jonathan Schanzer, the senior vice president of the Foundation for Defense of Democracies, told me the recent reconciliation agreement "is part of an overall attempt to shape the regional architecture." He said this was a gambit to try to take power out of the hands of Turkey, Iran and Qatar and to reassert the role of the more moderate Sunni Arab powers like Egypt, Saudi Arabia and the United Arab Emirates. "There is a certain amount of quiet coordination going on," Schanzer said. "It's hinting at the potential for deeper coordination between Israel and the Sunni Arab states."

Put another way, an element of this deal is to make Hamas, which is facing its own political and economic crisis, more reliant on moderate Sunni Arab states, who in turn will try to moderate the radicals.

At least that is the theory. Schanzer points out that Hamas this month elevated Saleh al-Arouri to its second-in-command. He was the planner of the 2014 kidnapping and murder of Jewish teenagers that sparked the last war between Hamas and Israel. He is also the founder of Hamas' Qassam Brigade.

What's more, the initial terms of the reconciliation agreement do not address Israel's red lines: disarmament and renouncing terrorism. Also, Congress prohibits U.S. funding for the Palestinian Authority if Hamas enters into a power-sharing agreement, unless Hamas makes a number of reforms.

Even though Hamas was coerced into the negotiations, it represents a major shift for the group, which is a branch of the Muslim Brotherhood, to accept negotiations hosted by the Sisi government. Sisi initially seized power from his country's elected Muslim Brotherhood president in a 2013 military coup.

In an interview Dahlan gave to the Associated Press in July, he said he was able to find common ground with the new head of Hamas in Gaza, Yehiyeh Sinwar. Both grew up in Gaza's Khan Younis refugee camp.