Washington's ability to mediate the Israeli-Palestinian conflict became more complicated Thursday after the militant Palestinian group Hamas announced plans to join the Palestinian Liberation Organization, furthering its reconciliation with rival Palestinian faction Fatah.

In April, the two antagonistic Palestinian groups signed an accord to close a divide that began with Hamas winning parliamentary elections in 2006 and culminated in a brief 2007 war. The possibility of a Fatah-Hamas unity government prompted questions about the Obama administration's ability to continue funding the Palestinian Authority, the West Bank's Fatah-controlled governing entity.

Hamas joining the PLO could potentially have even greater repercussions. While the Palestinian Authority is responsible for administering the West Bank, the PLO is an overarching institution that seeks to speak for all Palestinians worldwide and has functioned as the Palestinians' representative at the United Nations and in peace talks with Israel. Until now, Hamas has steadfastly refused to join the PLO or to endorse its claim to be the sole representative of the Palestinians.

A PLO Outreach

Those dynamics appear to be shifting. The Fatah-dominated PLO has signaled its willingness to incorporate not just Hamas but other, more radical factions such as Islamic Jihad, although elections are likely years away. While significant gaps remain between the positions held by Hamas and those held by the PLO -- the PLO recognizes Israel's right to exist, something Hamas continues to reject -- Hamas has recently shown a willingness to move away from employing violence, particularly given the success of nonviolent popular protests in propelling Islamists to power across the Middle East.

Hamas is unlikely to explicitly renounce the use of violence or formally recognize Israel in the foreseeable future but it has shown a willingness to bend its ideology when necessary, Haim Malka, deputy director at the Center for Strategic and International Studies Middle East Program, wrote in an e-mail. What we're seeing is a broad Palestinian convergence shaped by the failure of both Hamas and Fatah to achieve their basic goals, with Fatah unable to make progress with Israel and Hamas confined to the Gaza Strip.

Despite those shifts, the Obama administration will not have much room to maneuver. The State Department designates Hamas as a terrorist organization, and lawmakers in Congress have already pushed to cut off any aid to a government that includes Hamas. The administration will not accept a Palestinian government that does not abide by principles agreed to by the Quartet of international negotiators, which include abandoning violence and recognizing Israel's right to exist.

There's no live negotiations going on so it's not going to be something [the administration] will have to respond to immediately, but it's going to be illegal and a diplomatic headache if they ever do hope to start negotiations again, said Nathan Brown, a professor of political science and international affairs at George Washington University. He added that laws preventing the U.S. from in any way aiding a Palestinian Authority that included Hamas would likely apply to the Palestinian Liberation Organization as well.

Key Variable: Israel's Stance

Much depends on how Israel reacts. Brown noted that Congress has backed continued aid to the Palestinian Authority in large part because Israel believes the money is crucial to ensuring the West Bank's stability, particularly in bolstering American-trained Palestinian security forces. Congressional Republicans have aligned themselves with the Israeli right, headed by Prime Minister Benjamin Netanyahu, and President Barack Obama will not be eager to give fuel to critics who charge he does not strongly support Israel's interests.

Congress takes its views on this from the Israeli government, and it might be undiplomatic to say this but the Israeli government right now does not want a peace process, and certainly not one that involves Hamas, Brown said. The last thing they're likely to do is favor a peace process that involves Hamas.

Others are more optimistic. Miriam Elman, an associate professor of political science at Syracuse University, said the chaos engulfing Syria, a longtime Hamas patron, has forced Hamas to recalibrate. She pointed to the recent exchange of Hamas members imprisoned in Israel for the captured Israeli soldier Gilad Shalit as a tool of tacit diplomacy that signaled Netanyahu's willingness to find compromises with Hamas. The next crucial step, she said, is whether Hamas continues its move away from violence.

I think the days of suicide terror campaigns are over and that's incredibly important, in part to show the Israeli government that moving forward towards peace will not mean more terrorist activity, Elman said. I think what's going to be key is whether the naysayers have the power to spoil [negotiations] violently.

While Elman acknowledged that a thaw between the Israeli government and Hamas would face strong opposition, she noted that the Israeli government has been able to take similarly unpopular moves in the past, including its 2005 withdrawal from the Gaza Strip. Obama could have a tougher task.

The Netanyahu government, as rightwing and hardline as it is, has much more flexibility than the Obama administration has, she said. Obama's hands are tied by these laws and very hardline people in Congress.