In what follows, I will attempt to shed some light on what might be described as an Islamic position towards the declaration of a Palestinian state. It is presumed that at this stage in history, the lands of the state comprise the West Bank, including East Jerusalem, and the Gaza Strip. The Islamic position towards any declaration, treaty or the establishment of any institution, including a state, is dependent upon the fulfillment of justice. Whether the declaration of a Palestinian state as a by-product of the Oslo Accords achieves all the rights of the Palestinian people is indeed questionable.
However, it is understandable that the balance of power, and realpolitik, including inter-Arab/Muslim relationships, at this stage in history are not conducive to the fulfillment of all the rights of the Palestinian people. Moreover, the Palestinians have suffered enough, and to wait until full justice can be achieved once and for all is not to their advantage. Further waiting can only serve the interests of those looking to create more "facts on the ground," which means the continuous loss of Palestinian land to Jewish settlers.
The Palestinian state will clearly face many challenges on the level of realpolitik. Anyone with a minimum knowledge of the plight of the Palestinian people cannot subscribe to the view of a "natural" birth of the Palestinian state. If anything, its birth is tantamount to a "Caesarean" section, given the strenuous labor which predates the Israeli occupation.

Ending Occupation

This state, albeit with limitations, is welcome, not because it fulfills all the aspirations of the Palestinian people, but because it is perceived as an end to the occupation. Nevertheless, the concept of a nation-state proves to be challenging from two perspectives. First, the "nation-state" is a modern European idea that could be subject to deconstruction like many other modern concepts. In practice, many nation-states moved away from the original understanding and the circumstances that led to their rise. Today, the European Union is simply one vivid example of nation-states that do not see this modern political form as viable as they thought years ago. The second of these perspectives is the Islamic worldview which is ummatic1 in its essence and, thus, it advocates a political union amongst all Muslims. This could be achieved in a non-confrontational way by gradually empowering the already existing forums, such as the Organization of Islamic Conference (OIC). While this is not the place to discuss this issue in detail, there is a need for ingenuity in rethinking the institution of khilafah.2
Hence, the Palestinian state is conceived as having an organic union with the rest of the Arab and Muslim world. As such, the idea of a confederation with Jordan is only one step in the right direction. In practice, the process of Palestinization should not be stretched too far, otherwise it might lead to a collective psyche that resists unions with sister countries across the border.

Palestinian Statehood: Three Aspects

It should be clear that there are three aspects to the Islamic position regarding the establishment of a Palestinian state in terms of legitimacy: its relationship with Israel, civil institution, and its relationship to the Shari'a.3
Without analyzing the complex context that led to the rise of Israel, a historical insight might be helpful to understand one important yet ignored factor: the impact of modernity on the rise of nation-states in Europe and, as a result, elsewhere on this globe. The Zionist movement also participated in the international craze for nation-states. It represents the aspirations of the Jews (not all, though!) to have a nation-state of their own. It is not the right to a nation-state which is questionable here; what is at stake is the establishment of such a state at the expense of another people.
Islam does not question the rights of all people, including Jews, to peace and security (rare commodities for Palestinians). In fact, it is the lands of Islam that historically played host to the Jews who feared European persecution. The escalation of anti-Semitism in Europe to the degree it allowed the Holocaust to take place is absolutely abhorrent and should be condemned in the strongest terms possible. But to create a purgatory out of Palestine, so that Europe is able to clear its burdened conscience is categorically rejected.
As discussed earlier, the nation-state is subject to deconstruction, both in theory and practice. The European Union can be seen as a postmodern alternative to the nation-state which could not function as an autonomous entity. The same is applicable to Israel and the future Palestinian state. It is obvious that Israel is trying to be a member of some higher order, which explains the attempts to reinterpret the Middle East in a way that could accommodate it. Palestine, on the other hand, fits well into all paradigms: the Middle East, the Arab world and the Islamic world. It is the lack of acceptance that haunts Israel far more than other problems.

A Higher Moral Order

Knowing that ultimately the people of the region are looking for some kind of Pan-Islamic unity allows no room for Israel to be at home. It is quite unfortunate that the political leaders of Israel do not have a sense of history (or maybe they do, but chose to ignore it for immediate political gains). It is in this context that all talk about eternal political entities cannot be sustained. One example is the claim to Jerusalem as the eternal Jewish capital. This claim can neither be sustained theologically (i.e., including all three faiths), nor philosophically. Indeed, God did not guarantee the adherents of any of the three monotheistic religions a free hand. This land was once ruled by Jews and they lost it. The same is applicable to Christians and Muslims; each ruled more than once and also lost it. It is obvious that history tells us that no eternal governance was guaranteed to any particular group. Certainly none was chosen for this category.
As such, all assertions by any specific group to enjoy a divinely conferred special status is absurd. It is worse when a people is drawn to such a utopian status in a way that renders the others lower on the scale of nations or of simple humanity. The political implications of this position are clear: social Darwinism at work. There is a need for a higher moral order that can generate the maximum possible justice. The renowned Medieval Muslim scholar, Imam Ibn Taimiyyah, stated that God would make the just state victorious, even if it is non-Muslim. One could only emphasize the fact that Islam advocates a theology of justice, and that administering justice is a prerequisite for reconciliation.
From this perspective, nationalism is certainly not the solution. The following might not be a popular position: in the absence of an Islamic state, one democratic state is much better than two. Currently, a Jew who resides anywhere in the world qualifies automatically for the Right of Return. On the other hand, this Right of Return is automatically denied by Israel to the Palestinian refugee who resides in the Diaspora. This is clear injustice, and any institution that denies the Palestinians their historic (in fact, their basic human rights), cannot be seen as legitimate.

Normalization Unacceptable

That is why Israel will remain a de facto rather than a de jure state, a position which renders normalization with it unacceptable. Nevertheless, this position should not have an impact on internal Palestinian politics. Islamists should not be preoccupied with this problem to the extent of their being prevented from actively participating in the rebuilding of the Palestinian state on all levels.
The above position makes it imperative that the state invest heavily in civil institutions to ensure the participation of all parties concerned without relegating any specific one to perpetual opposition. Separation of powers, sustained pluralism and inclusive democracy (though shuracracy4 is my first choice) are a must for healthy and cordial relations within the Palestinian house.
That the state is an institution to serve the people and not to oppress them should be inculcated in the mind of every citizen, but especially in civil servants. A healthy civil society does not get along with despotic measures. There should be clear and binding laws. The prevailing ethos should reflect a deep respect for human rights. No one, for example, should be behind bars because of support for a particular political stand.

How Islamic?

The Palestinian state will also be judged in areas other than its relationship with Israel and the formation of civil institutions. Specifically, how Islamic is the new state? What is the role of the Shari'a in the formation of the new constitution? I believe that, rather than create a point of contention out of these issues, one should opt to work within the parameters of the law; to work with the state, rather than against it, in order to achieve any goal. This would lead to a greater tolerance of differences and to a continued striving for the common good of the society.
In this respect, secularist and Islamist, including independent scholars and activists, should open channels of communication that are not intended to revile the other. I have observed improper ways of addressing the other in quite a few conferences and forums, including TV shows, that have taken place in the past. A professional atmosphere should promote the rapprochement between both sides.
Moreover, the Palestinian state should have the ability to run its affairs independently without allowing any foreign power to meddle in its internal affairs. To be fully independent means that the state has to be strong enough to face the most pressing challenges. To be strong means that all those who could play a pivotal role in the shaping of the future state should be enlisted. One should learn to set aside differences for the sake of the public good.
One does not have to compromise one's position regarding the rights of the Palestinian people in order to advocate unity amongst Palestinians. This should be done in the spirit of strengthening the Palestinian leadership in order to safeguard Palestinian aspirations. Whenever the Palestinian state is declared, it will be long overdue.
I would like to conclude with the notion that, while there are general and specific guidelines that govern politics in the Islamic worldview, this does not, and should not, imply a rigid approach towards realpolitik; there is room for movement. This premise might be a prerequisite to the initiation of a new paradigm which could achieve greater justice.

1. From umma, meaning the Muslim community.

2. A successor or one who comes after. In Sunni Islam, the title was applied to the successors of the Prophet's temporal authority over the community.

3. The term is normally used to refer to Muslim law, i.e., the divinely revealed law.

4. From shura, meaning consultation. Classical theory held that a ruler should consult the leaders of the community who had a duty to give advice. Modernists have translated the concept into a form of quasi-democratic assembly, the majlis al-shura, which may be appointed, elected, or a combination of the two.