The Israeli secret services - largely regarded as death squads by Palestinians - have been told to operate once again in Palestinian "autonomous areas", while the PLO has warned that Israeli agents will be shot down if they are found. All relations between the Arab states and Israel are to be frozen, on the orders of the Arab League.
Why haven't the Americans - and, indeed, the Europeans - woken up to the imminent storm? Perhaps we journalists are to blame. After all, until only a few days ago, a BBC World Service reporter was still blithely talking about Israel's construction of a "Jewish housing project" on a "disputed" hill outside Jerusalem, as if all that was at stake was an argument over a public utility. The "project", of course, is a Jewish settlement and the hill is occupied Arab land upon which any construction is in flagrant violation of UN Security Council Resolution 242, the resolution that was supposed to be the very foundation of the 1991 Madrid "peace process".
It is not difficult to see how this kind of reporting can become mendacious as well as incomprehensible. If no more than a parcel of "disputed" land is at issue, how could it have led a Palestinian to murder three women in Tel Aviv? Even the Palestinian who killed three people at the Empire State Building - a murder equally incomprehensible when it was reported that he had no political motives - now turns out to have written a letter before his suicide in which he raged against the taking of Arab land by Israel.
It is, of course, too late to hope that the US will shake itself free of its thrall to Israel. Madeleine Albright devoted almost all her recent remarks on the crisis to the need for Arafat to prevent "terrorism", devoting only the mildest criticism to Israel for the Abu Ghoneim/Har Homa Jewish settlement. US negotiator Dennis Ross's latest visit to Arafat and Netanyahu proved to be a total failure. How pitifully Washington has fallen from the aspirations it held out to Arab and Jew at Madrid in 1991.
And how pathetic is the growing Arab appeal to Europe to intervene in the Middle East to save the peace. Europe? After the catastrophe of Bosnia, how can any Arab Muslim trust Europe? How, indeed, could any Israeli Jew trust Europe when from that continent's very heart came those who committed the most wicked crime of modern history, the Holocaust?
Yet Europe has been integrally involved in the "peace process". It was represented at the Madrid summit. It has bankrolled the 1993 Oslo agreement. It rewarded both sides with peace prizes and embassies, rewards that will be kept, of course, by those who are now destroying the peace. It was Europe, too, which accepted - long before the US and Israel ever did - that the PLO should be involved in peace negotiations. British, as well as other European ambassadors, met Yasser Arafat's senior officials throughout the Seventies. There is still a rumour in the Middle East that many of Arafat's speeches between 1988 and 1992 were drafted by the then British ambassador to Tunis.
And it was the member states of the European Union in 1980 that drafted the Venice declaration, which specifically stated that the PLO should be "associated" with peace negotiations. The terms of the Venice declaration were repeated by European foreign ministers in Paris four years later when they added their support to the "right of the Palestinian people to self-determination, with all that this implies" (the last five words underlined in the official statement).
The Europeans maintained their commitment to Middle East peace. In Brussels in 1987, Community foreign ministers were demanding an improvement in Palestinian living conditions in the West Bank and Gaza, and giving preferential access to the Community for goods from the occupied territories. A year later, the EU was welcoming the Palestine National Council's acceptance of UN Security Council resolution 242 - calling for total Israeli withdrawal from all occupied Arab land in return for the security of all states in the area - the same resolution that James Baker was later to cite, in confidential letters to Arab leaders, as the basis of the post-Gulf War "peace process".
There then followed the folly of the 1993 Oslo agreement, a deeply flawed private peace deal between Israel and the PLO that allowed both sides to delay the most important issues that separated them - giving Israel time, for example, to encircle Jerusalem with settlements such as Har Homa - which contained no international guarantees, which left half the Palestinian population with no "right of return", and, most damaging of all, effectively allowed Israel to renegotiate UN resolution 242 rather than be compelled to abide by it. A supine United States - whose Middle East policy is indistinguishable from Israel's - has signally failed to stand by its obligations as an "honest broker" in the "peace process". This is why so many in the Middle East are now looking towards Europe.
Enfeebled as it may be because of its lack of a common foreign policy, Europe none the less has a political stake in the Middle East. Last year, President Jacques Chirac showed how France could renew its ties with its former mandate territories of Syria and Lebanon and, by travelling to Damascus, French foreign minister Herve de Charette secured a place for France on the south Lebanese ceasefire committee last April, to the fury of the Americans and the Israelis. The French, as well as the Israelis, Americans, Syrians and Lebanese, now sit on that committee.
By visiting Jerusalem last October - and by publicly expressing his anger at the Israeli security men surrounding him before his visit to the West Bank - Chirac also encouraged the Palestinians to believe that Europe understood their predicament and the imbalance in the "peace process". Chirac felt personally humiliated, privately expressing his exasperation at the Israelis who insisted that he always left and entered his Jerusalem hotel via the tradesmen's entrance. But it was de Charette who bluntly asked this week "whether we can any longer talk about a peace process". It is the French parliament which is now reconsidering whether Israel should still be given special trading status with the EU.
Perhaps what is needed is a closer realisation of what the Middle East - and the north African nations, as well - mean to Europe. America has identified national interests in the Middle East; cynics might sum them up as Israel and oil, though not necessarily in that order. Europeans, too, have interests, although they have something infinitely more important: the nations of the Middle East are our neighbours. They will never be neighbours of America.
Since the 11th century, the conflict between Christianity and Islam has been our conflict. So why should Muslims trust us, given the murderous nature of that relationship? Yet in many parts of the Middle East, Europe is now seen as a balancing force - a proxy, if you like, to the old Soviet Union - whose friendship must last longer than America's, whose interests are more intimate to the Middle East, and whose relationship with the region - however tragic or evil it has been - at least now avoids the excesses of American policy.
The 1995 Barcelona conference offered European "partnership" with the nations of the Middle East rather than the traditional subservience that the US demands of its Arab allies. Barcelona demanded a peace settlement based on UN Security Council resolutions "and principles mentioned in the letter of invitation to the Madrid ... Conference, including the principle of land for peace ..." The Barcelona "Euro-Mediterranean partnership" - for it extended the Middle East to Morocco and Algeria - also produced political objectives: democracy, human rights, liberal economies. Not, you may say, the sort of aspirations likely to commend themselves to Arab dictatorships but none the less worthy, and essential to the nature of the proposed relationship.
So in the critical days ahead, Europe will have an opportunity to offer - at the least - a neutral third party as the American "peace process" inevitably fragments. Perhaps the catastrophe looming in the Middle East will force European ministers to unify their objectives in the region, even to follow France's independent lead.
In both Europe and America, the British foreign secretary Malcolm Rifkind has been doggedly criticising Israel's settlement policies, but it is going to need stronger stuff than this if Europe is to secure a role in the area. EU financial penalties against those who break their agreements might be a fair balance to the rewards that Europe has dutifully handed out over the past six years.
Perhaps it should also make an offer of peacekeepers from Nato nations who could ensure that the terms of the original 1991 "peace process" are kept, and who could judge how rigorously both sides are prepared to stick to the terms of this agreement. For only by a return to the land-for-peace deal based on UN resolution 242 - which the Arabs were originally promised - is a future bloodbath likely to be avoided.
Perhaps, too, European journalists (including the BBC) - as opposed to American reporters - must face more truthfully the moral issues of the Middle East crisis, however much they may be criticised for doing so. In any event, American credibility is now at its nadir in the Arab world. There is no reason why Europe should join it in disaster.