[The following, by Barry Rubin, is crossposted from The Rubin Report.]

The Gaza Strip is doing really well economically and the Hamas regime seems set to go on forever. It's raking in the aid money but every dollar and every project is shaped to ensure that Hamas remains in power, can return to violence in future and...wreck everything again.

"There are a slew of products here, and beautiful restaurants. Is this the Gaza we have been hearing about?" asked a Sudanese official arriving there, as quoted by the Palestinian news agency Maan. "Where is the siege? I don't see it in Gaza. I wish Sudan's residents could live under the conditions of the Gazan siege."

There is massive construction, including rebuilding what was destroyed in the war Hamas began against Israel two years ago. If Hamas were a normal government this would all be great. By normal government I mean even a normal dictatorship. Such a regime would say:

We're raising living standards, we're increasing our popularity. Why should we be so foolish as to go to war against a stronger neighbor and see all of this destroyed again?

But, of course, Hamas is not a normal ruling group. It believes that the Creator of the Universe is on its side and wants it to fight. Hamas revels in martyrdom. It thinks total victory and the killing of all Israeli Jews is achievable. And it knows that the rest of the world won't let it be fully defeated and thrown out of power no matter how many rockets, martyrs, and terrorist groups it sends into Israel.

As a dictatorial regime intending to control everything and stay in power forever, Hamas is locking the Gaza population into its patronage system, a sort of Islamist welfare state, so that people wouldn't dare break with their rulers.

The main project: is building 25,000 new housing units in the northern Gaza Strip, just west of Beit Lahiya. Here's how a business magazine explains it:

"The neighborhood...will be named after the residence of the 72 virgins waiting in paradise. The al-Buraq neighborhood, named after the horse Prophet Muhammad rode from Mecca to the al-Aqsa Mosque, will be built on the lands of Gush Katif. The Andalus neighborhood is aimed at reminding the Muslims of their days of glory in Spain."

Let's stop a minute and consider those names and what a reporter wouldn't even notice here:

--72 virgins: To remind everyone growing up there that they, too, can get six dozen virgins if they become a martyr by blowing up Israeli civilians.

--The horse: To remind everyone that their goal in life is to devote themselves to warfare so they, too, can travel to the al-Aqsa mosque and conquer Jerusalem.

--Andalus: To remind everyone of the one-time (and future?) extent of the Muslim empire which even conquered Spain, and where they also intend to return.

This is a fascinating example of how economic development mixes with political power and indoctrination. Up in Lebanon, Hizballah is doing similar things. But there's more, much more.

Who gets the apartments? First in line are the families of martyrs, prisoners, and wounded fighters. This shows the advantages of fighting for Hamas. The way you get an apartment is not to get a good education and work hard to earn the necessary money but rather to die in battle.

Next on the priority list come young couples who don't have an apartment or a lot to build on. That's nice, but it relates to the theme--which Hamas has voiced often--of maximizing population growth so as to achieve victory through overwhelming numbers, which also provides more fighters

Only in third place come families that lost their homes during the fighting last year, which is the group you'd expect to have the highest priority. All the humanitarian groups that have decried Israel's defensive war against Hamas might take note that Hamas has put the victims last in line for relief. This is a good indication of its thinking and policies.

You can bet, by the way, that Hamas loyalists will get put into line in each of these categories ahead of Fatah supporters. That gives people an incentive to switch sides and to support the regime.

Moreover, only those working for the Hamas government can get a bank loan; families of casualties can get help from Hamas-controlled Islamic charities. The rest can get mortgages only with Islamic associations controlled by Hamas. Anybody involved in opposition activities would probably get turned down. And, of course, the people who do get help must be grateful to Hamas for the roof over their heads.

Finally, the way the project is being laid out looks to me as if it is being set up as a barrier to any future Israeli military operation into the Gaza Strip.

On one hand, it will create a dense network of narrow streets and buildings which can be more easily defended by guerrillas, likely to inflict more casualties on Israel's soldiers.

On the other hand, it would be the architectural equivalent of a human shield, since Israeli forces would have to damage civilian apartments to engage Hamas men firing from them, thus creating a situation which could be falsely portrayed as a war crime.

At any rate, it should be rather impossible to speak about the Gaza Strip as deprived and suffering any more, though I suspect that won't stop a lot of people from doing so. .The article explains:

"There is apparently no shortage of money. Generous donations are flowing in from Iran, Islamic associations across the Arab worlds, and governmental elements in Kuwait and the United Arab Emirates, as well as Western elements.

"Palestinian President Mahmoud Abbas, who has been mercilessly pursuing Hamas in the West Bank, is aiding Gaza with millions of dollars, boasting that 57% of the Palestinian Authority budget is directed at the Strip. Abbas pays the salaries of 70,000 government workers from the post-Hamas era, maintains the health and education systems, and even funds some of Gaza's electricity production expenses."

So Hamas is awash with funds, no doubt using part of the money for paying, training, and arming its soldiers and security men. Unlike the Palestinian Authority, which rules the West Bank, however, Hamas is also putting in a tax system: value-added tax, income tax, tax on gas, and tax on all goods arriving from Israel. Bottom line: Hamas will take its cut of everything coming in and everything going on.

And how is the world responding to this? Well, Middle East peace envoy Tony Blair wants the sanctions reduced even further, presumably on the dangerously risky theory that if Hamas gets to be really wealthy and popular it will become moderate rather than better able to promote revolution and terrorism.

It is a good thing that Gazans will have nicer lives materially. But the same process will ensure that they will not have a better life in terms of freedom. With Hamas indoctrinating young people to become terrorists and even suicide bombers many of them will have shorter lives. And since Hamas is just preparing for another war with Israel--or provocations that will eventually lead to war--those apartments might not be there forever either.