M.E. Peace Process Is On The Edge Of The Abyss & The US Will Be Among The Losers.

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NICOSIA - The rapid deterioration of the Middle East peace process to a situation of near collapse is creating a very different scenario from that envisaged through the 1990s. Peace no longer seems just a matter of Israel having a deal with the Palestinians and with the Syrians. The only stumbling block is the status of Jerusalem, and no matter what may happen in the weeks ahead, neither the Palestinians nor the Israelis are likely to back down on their claims. This mean all the international envoys trying to stem the violence in Israel and the Palestinian territories can at best try to end the bloodshed which has claimed about 100 lives over the past two weeks.

US President Bill Clinton had hoped to build his legacy as the man who brought peace between Muslims and Jews in the Middle East. The chance of this happening is slim. It remains to be seen whether his successor, be that Albert Gore or George Bush Jr., would be able to progress beyond the obstacle that Clinton had reached - i.e. an uncompromising position on Jerusalem by both parties. The prospects of this happening are not very positive.

The latest upsurge of violence has created a poisonous atmosphere between the key players. Israeli Premier Ehud Barak and Palestinian President Yasser Arafat are trading charges and blaming each other for the turn of events. Meanwhile, Israel and the Arab World are blaming the US for being biased towards the opposite side. The US, in trying to appear neutral, has been turned into a bystander.

The situation in the Middle East now is ideal for all the State Department-labelled "states of concern" (formerly "rogue states") to reassert themselves. Sensing the difficulties facing the peace process, President Saddam Hussein of Iraq has already redoubled his efforts to paint himself once again as the saviour of the Palestinians. While most of the Arab World harbours no illusions about Saddam's concern for the Palestinians, they are also in no position to insist on continuing the total embargo against Iraq.

Thus Iraq has taken advantage of the regional situation to weaken the sanctions regime. Planes from several countries, loaded with humanitarian aid, have landed in Iraq over the past two weeks both with and without approval from the UN Sanctions Committee (see News Service No. 13). The US is in no position to press the issue at a time when the Arab World is convinced that Washington has shown its bias against them by first trying to block a UN resolution condemning Israel for use of excessive force - as the vast majority of those killed have been Palestinians - and then abstaining from the vote.

The US is in a very difficult position. With presidential elections just weeks away, neither the Clinton administration nor the presidential candidates can afford to make definitive commitments - partly because that may affect voting patterns and partly because such commitments might be rendered meaningless after the polls. But if the US does not get directly involved things could spiral out of control, to the point where another Arab-Israeli war cannot be ruled out. Clinton has offered to visit Egypt and mediate once again at a summit with Barak and Arafat.

The prospects of dramatic improvement in the situation are slim, however, even if such a summit is held. This is because all the sides involved know that further compromise on Jerusalem is impossible politically for Barak and Arafat, especially after the latest events. There is already broad agreement on all the other issues. Indeed, by Oct. 12, a stream of envoys and hectic telephone diplomacy had failed to even calm the violence; in fact it worsened with the killing of two Israeli soldiers and a retaliatory attack on Palestinian police stations in Ramallah and other targets in Gaza. Each side continues to blame the other: the Palestinians accuse the Israelis of preferring threats instead of dialogue, while Israeli officials say Arafat is using violence to get negotiating leverage.

The Clinton administration's credibility has been severely damaged on both sides. Israel and the US Jewish community have blasted the administration for not assigning blame to Arafat for the violence. The 'Washington Post' said on Oct. 12 that "a failure to speak the truth", i.e. to blame Arafat for the escalation of violence, "brings no honour to the United States".

On the Arab side, the US is seen as totally biased against the Islamic viewpoint. Arab commentators noted that Arafat was blamed by Clinton for not compromising enough at the Camp David talks, while Secretary of State Madeleine Albright said in a recent interview with NBC's ''Meet the Press'' programme the problem is that "the Palestinians, in many ways, are putting the Israelis under siege" by stone-throwing and violence. Demonstrations across the Arab World are reminiscent of what happened during the Gulf crisis of 1990-91. Public opinion in the region is united over not compromising on Jerusalem. Years of efforts by the US to appear as an "honest broker" involving diplomacy at various levels, including that of its Middle East "proconsul" (see News Service No.15) have been undermined by the latest developments.

There are many scenarios for what happens next, but the probability is not high for one that shows a restoration of normalcy in Israel and the Palestinian territories, a resumption of negotiations over Jerusalem, and a solution acceptable to both parties. At best, in the immediate future, an end to the violence can be expected. Some form of negotiations would begin, but it is more likely to focus on security issues - aimed at preventing a re-escalation of violence - rather than on the question of Jerusalem.

This will not help the overall situation, however. The Palestinian Authority has a declaration of statehood pending, having already postponed it from Sept. 13. When that declaration will occur remains to be seen. It could well happen in the coming weeks, especially if the Israeli side sticks to its position on Jerusalem and continues to impose tough security measures in the West Bank and Gaza. If Arafat declares statehood, the Israeli response would include annexation of territories in the West Bank. That, in turn, would definitely mean another explosion of violence.

The Arab response so far has been relatively mild. While there has been widespread condemnation of Israel, there has not been much belligerent rhetoric - except from Saddam Hussein. None of the leaders on the moderate Arab side, all of whom are allied to the US, wants war at a time when their economies are beginning to improve. On the other hand, they cannot sit quietly as it would give ammunition to the Islamists who target them as puppets of the US. A summit was called for during a recent visit to Egypt by Syrian President Bashar Al Assad, tentatively to be held on Oct. 21. The only direct action taken so far has come from the Hizbollah, which has kidnapped three Israeli soldiers and is offering their return in exchange for numerous Arab prisoners held by Israel for years without trial.