
Lore has it that the late President Ronald Reagan loved telling “the one about the pony.” In his rendition of the story, the parents of twin brothers—one a diehard pessimist, the other an eternal optimist—consulted a psychologist who recommended a unique experiment. On the twins’ next birthday the pessimist was shown into a room packed with the most expensive gifts the parents could afford, while the optimist was invited into a room full of horse manure. An hour later, when the parents checked on the pessimist, he complained bitterly about some arcane detail in one of his expensive gifts. In contrast, when they cautiously opened the door to check in on the optimist, they found him digging joyfully through the manure. “Mom! Dad! This is incredible!” the optimist shouted with glee. “With all the shit piled up in this room, there’s got to be a pony!”
Reagan’s anecdote is normally cited to illustrate the power of positive thinking, but in these abnormal times it also serves as a useful lens through which to make sense of the fragile ceasefire-for-hostages deal concluded between Israel and Hamas. The deal—brokered with American, Egyptian, and Qatari involvement—went into effect on Sunday after being approved by the Israeli cabinet. The three-phase agreement can be summarized as follows.
Phase One: Initial Ceasefire and Partial Hostages-for-Prisoners Exchange
The first phase of the agreement is by far the most concrete and detailed of the three. Over the span of an initial six-week ceasefire, Hamas would release 33 hostages, alive and dead, including 12 women and children, injured civilians and elderly men, among them two American citizens. Israel estimates that a substantial majority of the 33 are alive but has not managed to get Hamas to divulge the number of living or dead hostages. To maximize their chances of survival, the agreement stipulates that the live hostages will be let go first and the return of a live hostage will prompt the release of a larger number of convicted Palestinian prisoners than the return of a dead body.
As of today, three female Israeli civilians—Romi Gonen (24), Emily Damari (28), and Doron Steinbrecher (31)—have been released and reunited with their families. Another four hostages are expected to be released on Saturday. After that, three hostages are to be released every seven days, with the final 14 (mainly corpses) returned by the last week of the first phase. In exchange for the 33 hostages, alive and dead, Israel will hand over up to 1,904 Palestinian prisoners and detainees, including over 200 serving life sentences for murder.
In addition, during the first phase of the agreement, the Israeli military will withdraw from specified population centers in Gaza—notably Jabalia and Beit-Hanoun—and the Netzarim Corridor, facilitating the return of approximately a million displaced Palestinians to northern Gaza. The entry of humanitarian aid trucks into the Gaza Strip will also increase to around 600 per day (900 entered yesterday).
Phase Two: Permanent Ceasefire in Exchange for the Remaining Live Hostages
After phase one, the terms of the deal become far hazier and more tangential. The agreement stipulates that negotiations over the exact contents of the second phase are to begin 16 days into the initial ceasefire, with Israeli and Hamas officials expected to start negotiating a permanent end to hostilities, the release of all remaining living hostages—primarily male Israeli soldiers—and the full withdrawal of Israeli forces from the territory. Two-thirds of the remaining hostages—65 in total, alive and dead—will therefore only be freed if Israel and Hamas can agree upon, and fully implement, this nebulous second phase.
By day 50 from the initial ceasefire, Israel will be required to vacate the Philadelphi Corridor (Gaza’s border with Egypt), including the Rafah Crossing—locations which, for many months, Israeli Prime Minister, Benjamin Netanyahu, insisted were strategically essential for the IDF to control in order to prevent Hamas from massive rearmament.
Phase Three: Remains, Reconstruction, and Repatriation
The final phase of the agreement is also the lightest on specifics. It envisages the return of the remaining hostages’ corpses in return for Israeli cooperation in the comprehensive rebuilding of devastated Gaza, as well as the full repatriation of displaced Gazans back to their reconstructed communities. This phase is expected to last three to five years and involve the financial and development support of various donor-states and international entities. It leaves open the question of who would govern Gaza.
It makes perfect sense for Israel to go to extraordinary lengths to release the hostages. For 471 days of war, the kidnapped and their loved ones were at the center of public focus in every corner of the country, as well as in virtually every Jewish community around the world. Their names, faces, and stories are ubiquitous in the public sphere, a reflection of the Jewish ethos of “arvut hadadit”—mutual solidarity in the face of shared adversity.
Importantly, that ethos extends to all Israelis—Christians, Druze, Jews, Muslims—as evidenced by the fact that one of the 33 hostages Israel expects to receive in the first phase of the deal is Hisham al-Sayed, a mentally ill Bedouin Israeli who has been held by Hamas since 2015 after inadvertently crossing the border into Gaza. The next 40 days will be gut-wrenching, as Israelis anxiously await to see whether Hamas goes through with each scheduled release, not knowing until the last moment the condition of each person that emerges from the dungeons of Hamas captivity. The release of each living hostage in particular will not only trigger great collective joy in Israel, but act as a much-needed affirmation of the responsibility of the Jewish State to secure the freedom of every citizen and soldier put in harm’s way on October 7.
From a strategic point of view, however, if the deal signed with Hamas ends up being fully implemented, it is the deal of the century for Hamas and a bitter, dangerous failure for Israel. Under this scenario, after 15 months of brutal combat with the mighty IDF, with both its Iranian patron and peer-proxy Hezbollah severely curtailed, Hamas survives and is therefore victorious. Territorially, Hamas has not lost any land to Israel and the two sides return to the borders that existed on October 6, 2023. None of Israel’s war aims, as defined by the Israeli cabinet in the aftermath of the October 7 attack—namely the complete destruction of Hamas’s military and governing infrastructure and the safe return of the hostages—come close to being fully realized. In extracting the release of nearly 2000 Palestinian prisoners and bending Israel to its ultimate goal of ending the war bruised but intact, Hamas remains the preeminent paramilitary and political force in Gaza while simultaneously consolidating its dominance over Palestinian politics everywhere.
The already beleaguered Palestinian Authority, led by ailing Mahmoud Abbas, is driven into deeper irrelevance. In an extraordinary display of what Palestinians call “Sumud”—steadfastness in resistance to Israel—Hamas lives to regroup, rearm, and carry on the armed struggle against the Jews. Its resilience will surely win it greater Iranian support. Hamas and its junior partner, Palestinian Islamic Jihad (PIJ), have also just catapulted themselves to the top of the Global Jihad Premier League, inspiring every radical Islamist movement, in Egypt, Iraq, Jordan, Syria, Yemen, and beyond. If the agreement is implemented as formulated, terror is rewarded and the incentive to kidnap Israelis and Jews around the world rises sharply. Who needs nuclear weapons when you can bring Israel to its knees by kidnapping 250 of its citizens?
That deadly dynamic, by which Israel releases large numbers of convicted terrorists only to see them return to murder on an even greater scale down the road, has just been reinforced. Having freed the mastermind of the October 7 massacre, Yahya Sinwar, as part of the Gilad Shalit deal in 2011, Israel has learned nothing and is repeating the same mistake on steroids.
Since the full implementation of the deal signed leaves Hamas as the governing authority in Gaza—the one controlling organized violence and the distribution of essential public goods throughout the territory—it also amounts to a terrible betrayal of the population that has suffered most under Hamas’s rule: Gazans themselves. The failure to remove Hamas from power means that those who have sustained the greatest loss of life and property since Hamas took control of Gaza in 2006 can look forward to a future defined only by further violence, poverty, oppression, and hopelessness.
Finally, if the deal signed ends up being the deal implemented, it is also a bewilderingly risky political maneuver on the part of Israel’s prime minister, Benjamin Netanyahu, a figure whose longevity in power owes much to the consistent prioritization of personal survival over national policy. For many months, Netanyahu has made the promise of “total victory” the mantra of his right-wing base and has insisted that such a victory is merely a step away from being attained. If the deal signed ends up being implemented, Netanyahu will be accused of snatching defeat from the jaws of victory, undermining his hold on power.
Indeed, the deal is unpopular precisely among Netanyahu’s base. As a poll published by the Israel Democracy Institute on January 15 demonstrates, 56% of the Israeli right favor the continuation of military pressure on Hamas with the aim of achieving a better deal in the future (39%) or agree only to a temporary ceasefire in return for the release of some of the hostages (17%). Predictably, the signing of the ceasefire agreement has already prompted Itamar Ben-Gvir’s ultra-right party, Otzma Yehudit, to leave Netanyahu’s coalition government, and the prime minister also had two of his ministers from the Likud Party vote against the deal.
None of this makes strategic or political sense unless there is more than meets the eye. Netanyahu’s critics have been quick to explain his decision to sign the deal at this exact moment as a simple act of submission to President Trump on the eve of the latter’s second inauguration. Trump has repeatedly warned that there would be “all hell to pay” if hostages were not returned from Gaza by the time he reenters the White House, and it is certainly in Netanyahu’s interest to visibly align himself with the incoming administration. In doing so, Netanyahu is not only taking a further step to mend his personal relationship with the Boss of Mar-a-Lago—who undoubtedly still remembers Bibi’s treasonous act of congratulating President Biden on his electoral victory back in November 2020—but is helping to amplify “the Trump Effect” across the Middle East.
It is conceivable that this is all there is to it, and that the ceasefire-for-hostages deal signed with Hamas is, for Israel at least, little more than a room full of manure. Conceivable—but not likely. The deal signed begins to make sense only if one takes into account two additional possibilities. The first possibility is that, with the tacit knowledge and agreement of the incoming Trump team, Netanyahu has no intention of going beyond the initial ceasefire phase. Bibi may be banking on Hamas cheating or otherwise abrogating the deal by the end of phase one. One way or the other, under this scenario, the six-week ceasefire is meant only as a breather in which Israel returns as many live civilians and female soldiers as possible (knowing full well that Hamas will never release all the hostages, who are its only insurance policy), replenishes its ammunition stocks, and gives the IDF a much-needed break from long months of combat. In his first post-agreement speech, Netanyahu declared that Israel retains the right to resume war in Gaza and that it has the full backing of the United States to do so should the second phase of the agreement collapse.
Which brings us to the second, more hopeful, possibility: that there is a second deal—currently secret—not between Hamas and Israel, but between Israel and the United States, with Saudi Arabian involvement. Such a deal—an accord entailing U.S. security guarantees to Saudi Arabia, Israeli-Saudi normalization, and renewed pressure on Iran—would create a new regional order and therefore reframe the Israeli-Palestinian imbroglio. The dilemma of what to do in the second and third phases of the ceasefire-for-hostages agreement would not entirely disappear, but it would be placed within a completely different context. The incentive for Israel to renew fighting would be fundamentally weakened, while the diplomatic toolbox for extracting the remaining hostages and gradually transforming Palestinian governance towards a more sustainable, peaceful future would be dramatically expanded.
Viewed through this lens, the current deal is partly the price Trump has demanded Israel pay to shut down the war, and partly a bridging agreement to calm things in the region so an American-led process to expand the Abraham Accords can begin in earnest. In his inauguration speech yesterday, Trump declared his wish to be “a peacemaker and unifier” in the Middle East. Netanyahu himself has hinted that there was more than meets the eye in the timing and content of the agreement signed with Hamas. I am not a betting man, but in this case I’m leaning towards the eternal optimists. There has to be a second deal. There has to be a pony.
Amichai Magen is the director of the Program on Democratic Resilience & Development at Reichman University. He is a Visiting Professor and Fellow in Israel Studies at the Freeman Spogli Institute for International Studies at Stanford University.
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You know vastly more about contemporary Israel than I, but it seems to me that you dodge some basic points in considering the problem of a peace deal. Notwithstanding his slippery political manipulations, I think Mr. Netanyahu opposes and has always opposed a two-state solution. There is no obvious alternative to Hamas in part because of the Palestinians' foolishness, but largely because Netanyahu has worked hard and long to make alternatives unfeasible, to exclude a two-state solution. Even now the Israeli government could agree to release Marwan Barghouti, who possibly could become a genuine non-murderous alternative to Hamas.
Or perhaps its Regan's other story of the heroic pig with a missing leg: You don't eat a pig like that all at once. Or... we can look at it from the perspective what Israel really got for giving up a leg. Change the metaphor: When Israel strikes Iran now, well now Israel has Trump over a barrel.