Donald Macintyre: Will Israel finally bend to America's pressure for peace?

The gamble is that Netanyahu will be driven by a desire for a place in history

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The Americans are coming. Though Iran will doubtless be a prominent item on their agenda, the galère of US officials due in Jerusalem early next week hardly suggests a waning of presidential interest in an Israeli-Palestinian solution. Defence Secretary Robert Gates, Middle East Envoy George Mitchell, National Security Adviser Jim Jones, and the National Security Council's Dennis Ross, for better or worse, embody some of Washington's most high octane experience of the conflict. The opening chapter of Barack Obama's efforts on the Middle East is nearing a crucial stage.

Whether a freeze on Jewish settlements in occupied territory was the right issue for Obama to pick for a first fight with Israel can be debated. But Mr Netanyahu has not made the task of the Obama administration any easier by insisting there will be no freeze in Arab East Jerusalem, whose unilateral annexation after the Six Day War most of the international community rejects.

Unless Mr Netanyhau backs down over East Jerusalem – and there is no sign that he will – it is difficult to see how anything better than an agreement to disagree can be reached on this point. Nor, in reality, can the long-promised removal of West Bank settlement outposts, however welcome and possibly imminent, be used as part of a bargain to sweeten that pill. Even Defence Minister Ehud Barak – to his credit, albeit belated – has argued that the outposts need to be removed principally because of their blatant illegality in Israeli as well as international law.

But Israel is not President Obama's only problem. It is widely accepted that Palestinian President Mahmoud Abbas has few incentives to offer Israel. All the less so, ironically, given that Palestinian violence is currently low and that the effectiveness of Palestinian security forces in the West Bank has markedly improved. Which has sharpened the international focus on the – for Israel – big prize of recognition by the Arab states envisaged in their Peace Initiative, in return for a Palestinian state broadly based on pre-1967 borders.

The Netanyahu government has therefore sought early steps towards "normalisation". These might range from allowing El Al overflights, to opening telephone links with Israel. But Saudi Arabia, one key candidate for such steps, has so far been reluctant. Given this would reward Israel before the end-game is even in sight – and in return for a settlement freeze repeatedly demanded by the international community – that may be understandable. But it is not making President Obama's task any easier.

And that is before even considering the dysfunctional Palestinian split between Fatah and Hamas. It isn't wholly clear how the US sees this, beyond its President's acknowledgement in Cairo that Hamas has a constituency. On the one hand it has not lifted the pre-conditions for engagement with Hamas imposed by the international community under Bush. On the other it has not apparently sought to stop Egypt from trying to broker reconciliation between the two factions. In any case both look keener to retain control of their separate fiefdoms in the West Bank and Gaza than to bury their differences.

Nor is it easy to read a weakened Mahmoud Abbas. Some associates believe he will walk away if he has no deal on a Palestinian state to offer in elections scheduled for the end of the year. But the baffling passivity of his message in a Washington Post interview in May – that there is a "good reality" in the West Bank and that he can afford to wait for Israel (and Hamas) to see life his way – have enabled Israeli officials to question whether the Palestinian President is any readier than they are to conclude a deal. It conflicts with the increasingly persuasive argument that time is running out for a two-state deal. And it must have reinforced incipient US doubts that he will be able to sell one if it is ever struck.

Yet, despite all this, diplomats are still convinced that the US President is determined to see progress. They are struck by the adminstration's pointed emphasis that a peace deal is an American interest as well as an Israeli and Palestinian one. There is still hope of some form of a temporary but relatively far-reaching freeze at least on West Bank settlements. There is talk of Obama producing a "peace plan" in September. Hopes of making such a plan lift off then are based partly on the notion that it is easier, on the Nixon-recognises-Red China model, for the political right to make peace and partly on the gamble – and it certainly is a gamble – that Netanyhau will eventually be driven less by ideology than a desire to have a place in history and not to fall out irretrievably again with the Americans.

Netanyahu's lifting of checkpoints to improve Palestinian movement in the West Bank, along with an apparent determination to remove some outposts, could easily be mere displacement for real political progress. But they could also be the first sign of successful US pressure. Secondly, it appears that Ehud Barak, who for these purposes has replaced Avigdor Lieberman as foreign minister in the Netanyhau coalition in all but name, is warming to the Obama attempt at a comprehensive regional peace.

Some Israeli officials say Mr Barak is flirting with an interim Palestinian state on "provisional" borders – something hardly likely to commend itself to the Arab states, let alone to the Palestinians. But having been a profound sceptic on the talks by Ehud Olmert, he is gradually being drawn into the Obama initiative, not least because he sees the virtue of an alliance with Sunni Arab states against the perceived Iranian threat.

On the Palestinian side the gamble must be that, even if the settlement agreement is imperfect, Abbas will leap at talks with the Americans in the room and armed with their own blueprint of a peace deal; and that for fear of isolation in a stateless Gaza, Hamas will not actually sabotage them.

Either way the stakes are now very high. The point may come when the US President has to address directly an Israeli public that has shifted markedly rightwards with the eloquence he used to the Arab world in his Cairo speech. Certainly the collapse of the Obama efforts would not only be dangerous in the Middle East, but would seriously undermine the President's international credibility. And that in turn may be the best grounds of all for hoping that, against all the odds, he can still succeed.

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