Out of the spotlight, at least compared with the recent flurry of high-level US visitors to the region, or the corruption accusations against Israel's Foreign Minister, an event takes place this week that could have at least as much impact on the prospects for Middle East peace as either of these. Opening today is the first convention of the Palestinian Fatah organisation for 20 years. Being held in Bethlehem, it is the first Fatah convention ever to be held on Palestinian soil – although, as many delegates will lament, not in an independent Palestinian state.

Even one month ago, it was still not completely certain that the convention would happen. Yet as participants assembled in recent days, it was clear that two crucial tests had been passed. The first was whether there would be a quorum. With more than 2,000 delegates in Bethlehem by yesterday and more arriving, it was clear that this would not be a problem. Hundreds of Fatah veterans have converged from their countries of exile all over the Middle East, outnumbered only by a new generation of West Bank activists, who aspire to power in a Palestinian state.

The second test was for Israel: would Israel – especially one now governed by a fragile Likud-led coalition – play the national security card and try to stop the convention from taking place anywhere close to its borders. There were the unwelcome checks at crossing points into the West Bank, but Israel had evidently taken the wise decision to stand back, permitting even former Fatah fighters to enter the West Bank, though not Israel proper.

These are positive signs. Divisions among Palestinians have long hobbled progress towards peace in the Middle East, divisions that escalated into a formal schism when Hamas seized control of Gaza two years ago. If Fatah can unite around a more modern and pragmatic programme than the outdated one still advocating armed struggle, Israel can no longer complain that it has no credible partner for negotiation.

It was a former Israeli foreign minister, Abba Eban, who quipped that the Palestinians "never missed an opportunity to miss an opportunity". Those gathered in Bethlehem have the next three days to prove him wrong.