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You won't read much detail about the Hilles family on Wikipedia and the chances are you didn't hear about what happened to them earlier this year. News coverage of the Israeli-Palestinian conflict has tread the same well-worn paths for so long now that it is almost as if the media do not have the will or even the ability to explain how radically everything has changed in the last 18 months. The battle between Hamas and the Hilles family was so outside of the usual categories that we expect our Israeli-Palestinian news to come under - the peace process, terrorism, and Israeli incursions - that it was best left ignored.

If the media had touched it and done their duty to explain what this all meant, they would have been forced to address the real categories driving facts on the ground now: Hamas' establishment of a one-party state in the Gaza Strip, the seemingly irrevocable split in the Palestinian national movement that has crippled it for the foreseeable future, and the increased co-operation between an impotent Israel and desperate anti-Hamas Palestinians. This little vignette illuminates it all.

Palestinian society is to a large extent based around clans, which is to say families. Life is hard in the Palestinian territories and extended family groupings stick together to protect each other from Israel and other Palestinians; there are famous political families, famous crime families, and families famous for armed activity against Israel. The Hilles clan fit mostly into the first two categories. It is allied with Fatah, the moderate party that Yassir Arafat used to head, and was allegedly involved in a host of criminal activities across the Gaza Strip. Crime is a way of life for many Palestinians, a fact dictated by the poor shape of society and the rule of law. But in Gaza, times are changing.

The most significant developments in the Israeli-Palestinian conflict in decades came swiftly and suddenly between 2005 and 2008. In 2005, Prime Minister Ariel Sharon enacted the removal of all Israelis from the Gaza Strip; the occupation forces would withdraw, even if they might sometimes briefly return, and the Palestinians would be left to carry out an exercise in self-governance. Then in the 2006 legislative elections, Palestinians - sick of the corrupt and criminal Fatah, of which the Hilles clan was a representative - handed the Palestinian Legislative Council to Hamas.

Not content with this, Hamas staged a coup d'etat in Gaza in June 2007, completely overrunning the Strip by force of arms. Although the Fatah president, Mahmoud Abbas, still holds executive office, his writ does not run through Gaza anymore. An analogous situation would be to have a Republican in the White House, a Democratic Congress, but for the country to be split into two halves, each one listening to either the White House or Congress depending on who it supported.

Ever since, relations between Hamas and Fatah and the attendant violence has been by far the most important thing happening in the Israeli-Palestinian conflict. Israel and America have moved closer to Fatah, arming and training its police in the hope that the West Bank, which Fatah still controls, can be turned into an attractive model society to undercut the appeal of Hamas. Hamas also wants to build a model society, but its whole premise is the rejection and destruction of Israel; it accuses of Fatah of being compromised by its dealings with the enemy, who it wants to continue fighting even as it tries to enact its utopia.

The split between Hamas and Fatah has destroyed any hope of an Israeli-Palestinian peace in the near future. Fatah, who want to negotiate with Israel, have no control over Hamas, who do not. And the two parties are now putting much more effort into fighting each other than they are into the Palestinian national cause, because of course they believe that the realization of this cause depends on their own victory. Earlier this year, the Hilles clan became the most notable victims of this violence.

Hamas is in the process of imposing a one-party state in Gaza, and as such are setting about liquidating any organized opposition. They worry that Fatah might try to subvert them or dilute their power, and their extreme world-view has no place for other legitimate political movements; like many Islamists, they have totalitarian aspirations. The Hilles clan became a representative of everything about Palestinian society and politics that Hamas dislike - neck-deep in Fatah's corruption and criminality, more concerned with personal enrichment than fighting the Israelis. In the Hamas view, their presence in Gaza was corrupting and undermined the national movement.

In July this year, a bomb exploded in the Gaza Strip. The victims were a young girl and five members of the Izz ad-Din al-Qassam Brigades, the armed wing of Hamas which are named after the rockets they fire into Israel. But at the time there was a truce underway between Hamas and Israel - a hudna, as Hamas put it, a period for rebuilding strength before the battle resumes. Rather than blaming the Israelis - Hamas had no reason to break off the truce just yet anyway - blame was immediately apportioned to the Hilles clan. No-one can tell whether they were responsible or not, and there is no authority to investigate the bombing apart from Hamas; but investigation did not interest them, only revenge. Hamas saw an opportunity to liquidate the last centre of power in the Gaza Strip which they did not control, and they seized it with zeal.

On August 2, Hamas gunmen started amassing near the neighbourhood of Gaza Strip that the Hilles clan call home. They demanded that forty men within be handed over, men who of course they did not have the evidence to link directly to the attack but who they knew were the backbone of the clan. The men, fearing the torture that Hamas widely employs against its enemies, refused to go over. In the already tense atmosphere, shots were fired and two al-Qassam Brigades members were killed. Enraged, the gunmen stormed the area, and twelve people died and ninety were injured in the ensuing firefight; two Hilles members were shot execution-style, and many of the wounded had their injuries inflicted after they surrendered.

This pattern of violence is not unusual in the Gaza Strip now. When Hamas took over the territory, they shot many Fatah members in cold blood and threw others out of windows; they have been brutal in their arrest and torture of thousands of suspected opponents since the takeover. The operation against the Hilles clan was carried out in co-ordination with a campaign against individuals and organizations in the Gaza Strip that Hamas suspected of opposing them, including charities and aid organizations. Whether the Hilles clan had been responsible for the bombing or not, it was used as an occasion to move broadly against anyone in Gaza who Hamas viewed as suspect. The goal was intimidation and to preclude the emergence of any opposition; a pre-emptive strike against not those guilty of even acts of opposition to the illegal rule of Hamas, but just those suspecting of aspiring to it.

Meanwhile, the Hilles clan had an unusual recourse: they fled to Israel rather than stay and face the hands of the young fanatics of Hamas. Israel allowed them to enter and promptly arrested those who were known to be guilty of crimes against their own state, including the family's head. The others were sent to the West Bank to be near to their allies in the Fatah movements, although the reception they received was mixed: Fatah hardly needs to be seen as protecting a prominent family reputed for their criminality at a time when the legitimacy of their own movement is widely questioned by the Palestinian public.

What does this episode tell us about Palestinian society and politics at the moment? There is a cold civil war going on between Hamas and Fatah, who are doing everything they can to solidify their control over their territory and trying to claim the mantle of the national movement. But by fighting each other they weaken their cause, as Fatah cannot make peace without Hamas and Hamas cannot be seen as a legitimate representative of the Palestinian people while it tortures and shoots those who oppose it. Hamas have squandered the legitimacy that they gained when they won at the ballot box, while Fatah squanders its own legitimacy as it co-operates with Israel and receives American money to battle Hamas. While these contradictions remain, any talk of peace is entirely illusory.

The expulsion of the Hilles clan from the Gaza Strip marked the beginning of the end of the consolidation of power by Hamas. The truce with Israel has allowed Hamas to focus on internal matters, but soon they will seek to attack Israel to bolster their credibility and support in the West Bank and to further undermine Fatah. Yet their rule in Gaza has revealed the reality of the Hamas movement: now they control territory and can exercise power, they have shown no respect for democracy or the rule of law and have ruled by the gun. Their proposition has been, as Islamists always offer, one man, one vote, once.

Soon the cycle of violence will resume, and the split in the Palestinian national movement and the obvious hatred between the two sides poses a bigger structural challenge to peace than any action of Israel. Israel can withdraw its troops, it can build walls, it can remove settlers, it can give away land; and despite the grave obstacles that stand in the way of any of these things happening, they are much less serious than the mental obstacles to unity caused by Palestinian blood on Palestinian hands. In the small territory the Palestinians do have left, the blood does not have far to run.

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