Hamas’s victory in the Palestinian legislative elections is primarily a popular choice to punish and defeat the discredited and fragmented Fateh movement. Corruption and growing insecurity were major motivations in voters’ choice, and Hamas was viewed as more able than Fateh to create clean government and to enforce law and order, two of the most important aspects of state building. The peace process was dealt a fatal blow with Israel’s resort to unilateral action and further discredited Fateh. Yet opinion polls continue to indicate that Palestinians subscribe to a peaceful settlement based on coexistence of two states. A Hamas-led government could result in improved governance practices and a more democratic and empowered legislative council but much depends on the attitude of Fateh, Israel and foreign partners and donors. Despite its specificity, the Palestinian experience carries important lessons for the Arab world.