A Palestinian woman walks past a poster of Gaza's Hamas Prime Minister Ismail Haniyeh, left, and Egyptian President Mohammed Morsi in Gaza City on Aug. 25, 2012. Hamas had hoped the Islamists who took charge in Egypt this summer would swiftly turn their shared border crossing into a free-flowing trade route. However, a senior Hamas official acknowledged that Egyptian President Mohammed Morsi hasn't promised much and that it's time to scale back expectations of dramatic change. (Hatem Moussa/AP)

Dusty and palm-dotted, this Palestinian frontier town abutting the northern edge of Egypt’s Sinai Peninsula has emerged as the starkest symbol of Hamas’s hopes for a new era of relations between Gaza and Egypt.

The Palestinian militant group has been isolated by Israel, the West — and, previously, by Egypt’s former autocracy — since it wrested control of this seaside territory in 2007. But with the rise of the Egyptian Muslim Brotherhood, Hamas — a Brotherhood offshoot — sees new opportunity, and there is growing talk here that Egypt might lift the siege, initiating European-style passage for all, a free-trade zone, perhaps even an industrial park.

“We are looking for normalization,” Mahmoud Zahar, a senior Hamas leader, said in an interview in Gaza City, where intersections are adorned with billboards of Hamas Prime Minister Ismail Haniyeh and Egyptian President Mohamed Morsi smilingly shaking hands against a backdrop of Egyptian pyramids.

The Gaza Strip is home to 1.7 million Palestinians, all living in an area roughly twice the size of the District of Columbia. A limited number of people but no goods cross through Rafah, Gaza’s only border opening not controlled by Israel, which severely restricts passage of products and people through two other entry points. Advocates say opening Rafah could end Gaza’s electricity shortages, reduce its massive unemployment and bring the smuggling of goods and people, which now takes place in tunnels beneath Rafah, above ground.

But Gaza’s Rafah dreams have not materialized as quickly as Hamas had hoped, making the crossing also an emblem of the uncertainty in this shifting region. Egypt has bigger priorities, as it underscored after an assault on Egyptian soldiers in early August, which Egypt blamed in part on Palestinian militants who had entered the increasingly restive Sinai Peninsula by tunnel.

A map of Rafah, Gaza Strip (The Washington Post)

Egypt promptly shut the crossing and some tunnels, sending prices of smuggled goods in Gaza soaring and prompting grumbling here that the new Egypt was employing the old-Egypt tactic of unfairly punishing all Gazans. After a three-week closure, Egypt announced a full reopening in late August.

“We understand the security situation in Egypt, and we feel angry for the killing of sixteen Egyptian soldiers,” said Maher Abu Sabha, head of the Rafah border point in Gaza. “It is not fair to kill Egyptian soldiers. And it is not fair to prevent us from traveling.”

Hamas officials say there is no evidence that Gaza-based militants were involved in the attack.

Zahar said he knows Egypt is mindful of its ties with the United States, which provides aid, and Israel, with which Egypt has a peace treaty. Both countries view Hamas as a terrorist organization.

But Zahar said he is confident that Morsi will fulfill a recent pledge to increase border-crossing hours and the number of Gazans allowed daily into Egypt. Once Egyptian security forces secure Sinai, Zahar predicted, trucks piled with goods will ply the border. The Egyptian public, which overthrew an autocrat and generally opposes the peace treaty with Israel, will demand it, he said.

“The popular attitude pressures any administration,” Zahar said. “In addition to that, the revolution is with Palestine, with the resistance, with Hamas.”

A different view

But not everyone here is sure that drawing closer to Egypt via Rafah would be best. Some business owners who import goods through Israel, which restricts the kind and number of items it allows in, said they worry Gaza might be flooded with inferior Egyptian-made products.

“Nothing prevents us from importing through the tunnels,” said Tareq Alsaqqa, who owns a chain of home appliance stores. “But we prefer to bring goods from Israel. Why? Because the goods that enter from Israel go through quality testing.”

Worse, some said, opening Rafah might prompt Israel to shut its crossings into Gaza, further dividing the strip’s residents from their compatriots in the West Bank, which lies on the other side of Israel and is run by the other main Palestinian movement, Fatah. Egypt has been urging Fatah and Hamas, bitter rivals, to form a unity government that could push for an independent Palestinian state. But the process has been stalled for months.

Usama Kuhail, president of the Palestinian Contractors Union, said he fears that an open border could instead lead Gaza to become a “governorate” of Egypt — one adjacent to the lawless and impoverished Sinai, which many here view as even less developed than Gaza.

“We don’t want to deal with Egypt and become another Afghanistan,” he said. “It’s very dangerous for us, because it destroys our dream of becoming a Palestinian country.”

‘Change’ in attitude

A prominent proponent of open trade with Egypt is the Gazan businessman Mahmoud Yazegi, whose family bottles and distributes Pepsi products — made bubbly with ­tunnel-smuggled carbon dioxide, which Israel bans from entry. Yazegi is also Gaza chairman for the Palestinian Chamber of Commerce, and he has spent the past 18 months meeting with business leaders and officials in Egypt, Gaza and the West Bank, drawing up plans for a free-trade and manufacturing zone.

In that time, Yazegi said, he has seen “complete change” in attitude among Egyptian security officials, who he said now realize Sinai can only be secured if trade to Gaza is regulated. But Egypt is wary of splitting Palestinians, said Yazegi, who conceded that he shares the same concern.

“If it’s open, if the goods are coming, we are a state,” he said of Gaza.

Hamas officials reject the idea of a split as propaganda spread by their political rivals. In a recent interview in the suburban Cairo villa where he has taken up residence, Hamas’s deputy leader, Mousa Abu Marzook, said no one makes the same argument about the Israeli-occupied West Bank, even though people and commodities cross its border with Jordan.

“You won’t find any Palestinian who will forget his cause, or forget his country, or forget his village,” Marzook said.

Egypt’s military loosened travel restrictions for Gazans in May 2011, after the ouster of President Hosni Mubarak. But Gazans — and smugglers — say the passage of both people and goods remains subject to authorities’ whim.

Crossing the border

One recent afternoon, some smuggling tunnels were operating apace. At the official Rafah crossing, hundreds of Gazans sought shade from the searing sun as they awaited word about whether they would first be allowed to leave by Hamas and then be allowed into Egypt. The procedure seemed like a semi-corrupted game of chance.

A busful of young men selected by the Hamas-run Ministry of Youth to attend a tour in Turkey made it past at least the first stage. In the departures hall were several Palestinian families who live outside Gaza, leaving after summer visits.

Outside the gate waited Abdul Rehman Kehail, who said he had never left Gaza in his 20-year lifetime, and who had made arrangements to go to Cairo for eye surgery and “to breathe clean air.” But Rafah officials told him he would not cross that day.

To his relief, he discovered there was another way. To his dismay, it was a murky process called “gate coordination,” and it would cost $500.

“I was so enthusiastic,” he said. “But now I am so upset by this procedure.”

Asked whether the new Egyptian government would relieve Gaza’s woes, Kehail shrugged.

“We can only hope,” he said. “We haven’t seen anything from the new regime up to now.”