Hamas is turning its back on suicide bombing and suggesting that it might accept a two state solution. This marks solid progress from that organisation that introduced suicide bombing to the Palestinian conflict (it originated with the Tamil Tigers) and until recently maintained an "into the sea" policy on Israel. While there are all sorts of messages coming out of the PA and declarations should not be accepted at face value this does appear to be movement in the right direction.
It has to have something to do with the suspension of funding that has been implemented by the US, Israel and Europe. This cost and the difficulties it created with sustaining the Palestinian Authority forced Hamas to confront reality. The Europeans, as the largest donor, are particularly significant here with Angela Merkel in particular, proving again to be a superb international operator, having played a large part in introducing a stick to policy towards the Palestinian Authority. A few of the arguments against a suspension of funding were always somewhat questionable:
1) They will get funding from other sources: Firstly, this contradicts all of the other reasons given not to reduce funding. Secondly, if this doesn't involve substantial costs why aren't they doing it now? Being funded by the crusader West surely has to involve substantial political costs for the PA.
2) This will shut down services essential for the running of the Palestinian state: It will involve costs to the people but that is the nature of any kind of sanction against another state, however, most of the budget goes towards a paramilitary police force and paramilitaries are political bodies who, at least in the short term, will turn up regardless. That they are a paramilitary can be seen in a group of the police officers storming the parliament in protest after Hamas were elected.
3) This is undemocratic: No, believing in democracy means that we defend the sovereignty of democratic states, it does not mean that there cannot be costs to political choices. If a state votes in Communists it will become a lot poorer as the result of a legitimate democratic choice but this does not mean we need to step and provide financial aid in if we believe in allowing "free" democratic choice. We have to tolerate democratic choices but we don't have to give them our money.