In Israel the stakes can only get higher

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"Peace must be restored," declaim the commentators on the airwaves and in print, "because the alternative for the Middle East is unimaginable." And so the negotiators, from the USA, the UN and the EU fly out once again to try to square the circle of Palestinian rights and Israeli insecurities. Meanwhile - if any of us were tempted to think that events in Palestine have nothing to do with us - in the Yemen the British embassy is bombed and an American warship is attacked. The price of oil soars and the stock markets fizzle.

"Peace must be restored," declaim the commentators on the airwaves and in print, "because the alternative for the Middle East is unimaginable." And so the negotiators, from the USA, the UN and the EU fly out once again to try to square the circle of Palestinian rights and Israeli insecurities. Meanwhile - if any of us were tempted to think that events in Palestine have nothing to do with us - in the Yemen the British embassy is bombed and an American warship is attacked. The price of oil soars and the stock markets fizzle.

Of course, we hope the efforts of Hosni Mubarak, Madeleine Albright, Robin Cook and the rest of the wannabe peacemakers will succeed. Yasser Arafat's agreement to participate in the Egyptian talks is encouraging. But the fear is that - like so many before them - they will fail, and our attention must now turn to that "unimaginable alternative". Because the first step towards any kind of deal must be an acceptance that there is fault on both sides. Neither Israel nor the Palestinians has a monopoly on righteousness. "Only one side is shooting, only one side is dying," claim the Palestinians.

Rubbish. The shelling of Ramallah, and of Mr Arafat's home was a "token reaction" suggest the Israelis. Drivel. The butchered soldiers were either "death squads" or "reservists" - depending on whom you believe. Such a chasm of understanding leaves no room for compromise. And the divide is widening. Ariel Sharon's visit to Jerusalem's Temple Mount sparked the violence - but it will probably earn him a place in government. Hamas fighters are at the forefront of attacks on Israelis - and Arafat has released scores of the most militant from jail.

The fundamental problem remains: Israel has a right to exist, so does Palestine - and both legitimate claims are to the same stretches of land. Over the next few weeks, Mr Arafat is likely to up the stakes still further, emulating Israel's action in 1948 by declaring statehood, and defying Israel's allies in the US State Department to refuse him recognition. If we think things are ugly now, they are likely to get worse, as the respective leaders are pushed further towards extremism by their outraged peoples.

So that "unimaginable alternative" looms. Many more will surely die on both sides before even a temporary ceasefire is considered. There will probably never be a final, all-encompassing peace deal of the sort envisaged during the Oslo accords. The Nobel prizes will gather dust brought in by the desert wind, but will mock those who - with hope over experience - told us that a final deal was tantalisingly close.

Probably the best we can hope for, rather than a unified Middle Eastern settlement, is a series of less headline-grabbing piecemeal agreements over individual issues: water rights, refugees, settlements, Gaza and the West Bank, the Golan Heights, and - most intractably - Jerusalem. Reaching compromise will take years, but rant and rail as they will, the Palestinians have no one but Ehud Barak to deal with. Curse as he may, Barak must sit down with Arafat. Much as they hate each other, the two sides recognise that behind their enemies are not friends - only yet more bitter enemies.

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