Earlier this evening the Israeli cabinet approved a deal by a vote of 26-3 which would free IDF Corporal Gilad Shalit. FM Avigdor Lieberman, National Infrastructure Minister Uzi Landau, and Vice PM Moshe Ya'alon voted against the deal. In exchange for Corporal Shalit, abducted in 2006, Israel will release 1027 Palestinian prisoners.
The deal is likely to have three key effects:
1) Bump Netanyahu in the polls. Gilad Shalit's cause resonates deeply with Israelis, the vast majority of whom have served in the IDF themselves. The return of Corporal Shalit will be the feel-good story of the decade in Israel, and PM Netanyahu will receive great credit for overseeing the deal. While criticism from the far right may have negative implications for his coalition, the mainstream Israeli center likely will value the return of Cpl. Shalit over the inevitable exchange of prisoners it required.
2) Increase the regional political salience of Hamas. Hamas has been marginalized by the Palestinian statehood bid at the UN. Its strategy thus far has been to oppose the bid, lay low, and wait for an opportunity to spoil any move towards reconciliation between Israel and the PA. The release of Cpl. Shalit will put Hamas on the radar of the West in a way it hasn't been for a while. From the Gazan side, Hamas will likely receive credit for the release of 1027 prisoners. The prisoners issue is a very sensitive one among Gazans, meaning that this credit will likely come with emotional value for all Gazans.
3) Build confidence between Israel and Egypt. Egypt was instrumental in moderating the deal between Israel and Hamas. Given the turmoil in Egypt, many Israelis fear a slide towards extremism there. However, the deal demonstrates that Egypt's relationship with Israel is still good enough that it will play a constructive role in Israel's tense relationship with Hamas.