Martin Indyk, Bill Clinton's ambassador to Israel, has a plan for Palestine. Roughly speaking, let Hamas run Gaza and then deal with Mahmoud Abbas in the West Bank "where he can depend on the Israel Defense Forces to suppress challenges from Hamas, and on Jordan and the United States to help rebuild his security forces." Abbas will gain control over the West Bank and then "could make a peace deal with Israel that establishes a Palestinian state with provisional borders in the West Bank and the Arab suburbs of East Jerusalem."
Meanwhile, Palestinians in Gaza could compare their fate under Hamas's rule with the fate of their West Bank cousins under Abbas -- which might then force Hamas to come to terms with Israel, making it eventually possible to reunite Gaza and the West Bank as one political entity living in peace with the Jewish state. It's hard to believe that such a benign outcome could emerge from the growing Palestinian civil war. But given current events, this course is likely to become Abbas's best option.
Daniel Levy raises a very of objections. I would just note that, in broad outline, what Indyk is doing here is continuing the decades-long search for a quisling regime in Palestine. Indyk sees Abbas as weak enough to require Israeli support to maintain control over the West Bank, but strong enough to be able to maintain such control if he gets the Israeli support. Thus, Abbas -- if he's rational and cynical -- should be interested in cutting a deal with Israel on whatever terms secure him that Israeli support.
The reference to Palestinian borders in "the Arab suburbs of East Jerusalem" means that to obtain this Israeli support, Abbas must agree to cede the entirety of Jerusalem proper to Israel, as well as agree to let Israel keep the large settlement blocks (these would be the non-Arab suburbs) near Jerusalem. Since the IDF will be helping Abbas maintain control in the West Bank, this presumably means Israel gets shared access to West Bank airspace for military purposes and the ability to maintain some kind of military facilities there.
This kind of deal, however, is precisely what no substantial force in Palestine has ever been willing to accept. Some Palestinians demand the elimination of Israel or its de facto elimination through a strong "right of return." Others have been willing to accept a genuinely independent Palestinian state based more-or-less precisely on Israeli withdrawal to the pre-1967 borders. There's just never been a Palestinian constituency -- not just no majority constituency but no constituency whatsoever -- for what Indyk is proposing, essentially a Palestinian state on those parts of the West Bank that are of no practical value to Israel and that's in some sense a dependency of Israel in security terms.
In principle, obviously, Indyk's solution could work, but I doubt it. The Palestinians have shown nothing over the years if not a great willingness to reject short-term amelioration of living conditions on behalf of larger political principles. It seems to me that a Palestinian leader who accepted a deal on these terms would be discredited and would need to rule the West Bank purely as a creature of the Israeli government and would find himself in constant conflict with the local population.