Well, don't this beat all. Islamic Jihad, the most rejectionist Palestinian faction, says it may recognize Israel, accept a 2-state solution:

Last update - 13:06 03/08/2005
Islamic Jihad head: We may recognize the State of Israel
By Gideon Levy, Haaretz Correspondent

An Islamic Jihad leader in the West Bank, Abdel Halim Izzedine, known as Abu Qassam, has told Haaretz that his organization supports the hudna - temporary cease-fire - but is forced to respond to Israeli provocations.

"Israel forces us to react. If Israel stops the assassinations and arrests, we will observe the hudna," he said, adding that if a young Palestinian were to approach him and tell him he was on his way to carry out a suicide attack, he would try to dissuade him.

In his first interview with an Israeli news outlet, Abu Qassam said his organization might recognize the State of Israel.

"If Islamic Jihad participates in the Palestinian Authority, and the PA reaches a settlement with Israel, this will be recognition on our part. Not official recognition, but recognition," he said.

Abu Qassam further says that an irreconcilable chasm separates his movement's ideology from Zionist ideology. However, just as Zionist ideology is beginning to give up parts of the Land of Israel, so his organization would be willing to give up parts of its ideology calling for an Islamic state from the river to the sea.

"Each one will keep its ideology in its heart," he said. Abu Qassam said negotiations between his organization and Israel were a possibility, one he had rejected until now. He called the disengagement plan a "security program designed only to minimize damage for Israel, not to enable Palestinian independence," adding, "we will not wait for the occupation to leave."

Abu Qassam, one of the heads of Jihad's political arm in the West Bank, says the present intifada brought the Palestinian factions closer together, and called Abu Mazen a "serious and honest man," who is taken for his word by his organization.

"Arafat believed in armed struggle and was not afraid of civil war. Abu Mazen does not believe in armed struggle and opposed civil war. We are with Arafat on the matter of the armed struggle, and with Abu Mazen in the desire to prevent civil war," he said.

After 12 years spent in Israeli prisons, Abu Qassam says he doesn't hate Israelis. "I would like to get to know their human side ... both sides see only the negative in one another," he said.

The full interview will be published in the weekly magazine on Friday.

Reminds me of Ismail Abu Shanab, the moderate Hamas leader who Israel assassinated to end that last pesky hudna in the summer of '03. Expect this guy to move up the hit list.

See also: WW3 Report #32