The upheavals in the Arab world have brought new dynamics into the Middle East conflict. Israel finds itself increasingly isolated and is under growing pressure to advance the prospects for a two-state solution. The Palestinians have finally managed to seal a reconciliation deal, which marks a potential turning-point on the road to peace. The US and the EU must make some important choices too. A more pragmatic Western approach towards Hamas is indispensable if the peace process is ever to deliver meaningful results.