But a close examination of what Mr Barak has actually said since he was elected does not hold out much hope. If Palestine is already a de facto state, Mr Barak is not going to allow Jerusalem to be its capital, and has no intention of dismantling the major Jewish settlements on occupied Arab land. Sovereignty, borders, water, security - all will remain in Israel's power.
So what kind of state will Yasser Arafat rule from his garbage tip in Gaza? Already Palestinians fear that he will settle for a "capital" in the village of Abu Dis and Palestinian "control" of a few Muslim holy sites in Jerusalem. Already, Mr Barak is known to want to abandon the Wye agreement which promised 13 per cent of the West Bank to Mr Arafat - in return, say the Israeli press, he may offer Arafat recognition for his corrupt and divided "state".
The Palestinian chairman, who has turned into just another tinpot Arab dictator, will find out what is in store at today's summit with Mr Barak.
Many Palestinians, however, fear that Israel will delay serious talks - let alone the "final status" negotiations on Jerusalem, Jewish settlements and Palestinian refugees - until it has concluded a peace with Syria and, by extension, with Lebanon. If Mr Barak is serious about returning the occupied Golan Heights to President Assad - and if both sides can agree on the lines of withdrawal - the way is open for an Israeli retreat from Lebanon.
Yet Mr Barak has been vague about his timetable. And it was the Lebanese leader, Selim el-Hoss, who spotted that in his first Knesset speech as Prime Minister, Mr Barak referred to UN Security Council resolutions 242 and 338 -- which call for Israeli withdrawal from Arab territories captured in 1967 - but not 425, which demands a complete, immediate and unconditional withdrawal from Lebanon.
President Assad has meanwhile been visiting his old Russian allies in Moscow, where he reaffirmed undying fraternal bonds of friendship with President Yeltsin and, according to the Russian press, arranged the purchase of $2bn (pounds 1.3bn) worth of weapons. The trip was originally scheduled before Nato's war in Yugoslavia, but that conflict has inevitably raised questions about Syria's intentions.
Is President Assad hoping to involve Moscow again in the Middle East, just as Russia became involved in Serbia? Is Syria looking for a "balance" to offset the overwhelming influence of the United States, to ensure that a breakdown in Middle East peacemaking will affect American-Russian relations as gravely as it will the region?
Jordan, whose largely Palestinian population remains exasperated at the peace treaty with Israel which the late King Hussain bequeathed them, is meanwhile trying to reassert itself as an intermediary between Israel, "Palestine", America and Syria. King Abdullah was trumpeting the stability and investment opportunities of his country on his recent visit to the US before flying off to Gaza to advise Mr Arafat. And according to opponents of the Palestinian leader, this will mean accepting whatever bones are thrown at him by Washington and the new administration in Israel.
The real problem, however, remains the corrupt nature of the "state" that Mr Arafat thinks he is going to rule. In a society whose democratic institutions have been ignored by the former PLO leader and in a police state environment in which prisoners are regularly tortured and die in custody, there is little impetus to negotiate seriously with the Israelis. It seems that Mr Arafat, instead of demanding that every paragraph of the original Oslo agreement should be fulfilled, is content to enjoy whatever bit of power Israel concedes.
As that ferocious Palestinian critic and scholar Edward Said remarked recently: "If there is anything the last five years have taught Israelis, it is that Arafat can be trusted to do the job of policing and demoralising his people far better than the Israeli Civil Administration ever could..."
But Said's contention that a real democratic opposition may yet flower in "Palestine" is supported by little evidence. Palestinians may complain, but President Clinton has paid them a visit, and their statelet is equipped with all the usual symbols of Arab "independence" - an airport, guards of honour, 11 separate secret police units and colourful postage stamps - that Mr Arafat has always dreamed of.