A simple choice: live together in peace or in a permanent state of war

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Tuesday's agreement between Israelis and Palestinians in Sharm el-Sheikh is welcome, but it is no more than the absolute minimum that had to be achieved. Failure would have led to renewed and perhaps even bloodier turmoil; it would have heightened the risk of a general Arab-Israeli conflagration and increased uncertainty in the oil markets, with all that that implies for the health of Western economies. For all those reasons, failure was unthinkable.

Tuesday's agreement between Israelis and Palestinians in Sharm el-Sheikh is welcome, but it is no more than the absolute minimum that had to be achieved. Failure would have led to renewed and perhaps even bloodier turmoil; it would have heightened the risk of a general Arab-Israeli conflagration and increased uncertainty in the oil markets, with all that that implies for the health of Western economies. For all those reasons, failure was unthinkable.

But President Clinton's latest exercise in knocking heads together will have produced, at best, a ceasefire. For even that to hold, it will have to be accepted by extremists on both sides on the ground; the initial reaction of Hamas, the militant Palestinian group, that it would not be bound by the deal, is an ominous pointer.

Details of what has been agreed are scant. Ehud Barak, the Israeli Prime Minister, and the Palestinian leader Yasser Arafat have pledged to halt the violence that has claimed more than 100 lives over the last three weeks; they have decided to set up a US-led fact-finding committee to study the causes of that violence; and they have agreed to explore a restart of wider peace negotiations. In other words, a resurrection of the seven-year-old Oslo peace process, which, after the failure of July's summit at Camp David and the mayhem in the West Bank and Gaza this autumn, had seemed dead in all but name.

No timetables have been set for a ceasefire to come into force, or for the withdrawal of Israeli tanks from the main flashpoints. Conceivably, this is an encouraging sign. Perhaps Mr Barak and President Arafat have given in private firmer commitments than they dared make public in the present explosive climate. Perhaps Mrs Albright's claim that a truce would come into effect "within hours" will prove correct.

Cold logic alas suggests an opposite conclusion. The understanding was vague because it could not be otherwise, because even Mr Clinton, for all his gifts of cajolement and compromise, could extract no more. As it is, despite the involvement of Kofi Annan, the UN Secretary General, in the inquiry, Mr Arafat has failed to secure the fullscale international investigation, refusal of which by the Israelis led him to abandon an earlier summit with Mr Barak this month. The Israeli Prime Minister, for his part, awaits an unequivocal call from Mr Arafat, which Israel - rightly or wrongly - insists could turn off the Palestinian protests like a tap.

But assume there is an immediate ceasefire. That would merely rewind the clock to 28 September, when Ariel Sharon, the leader of the hardline Likud opposition, made his blatantly provocative visit to the Islamic holy places on Temple Mount in Jerusalem. Even then attempts to reach the elusive final status agreement were hopelessly deadlocked on the problem of Jerusalem; that deadlock is today, if anything, even more complete.

So, at best, a cooling-off period first, in which the domestic political supports of two weak leaders can be strengthened. Then, if a minimum of trust can be rebuilt, a resumption of longer-term peacemaking. The bottom line remains unchanged. Geography and history condemn Israelis and Palestinians to live together - either in peace or in permanent quasi-war. Just possibly, the agreement at Sharm el-Sheikh was a grudging acceptance that the first option is preferable.

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