Phil Reeves: This Saudi prince's blurred vision could solve the Middle East crisis

'The prospect of peace with the Arab world is alluring to Israelis, but Mr Sharon is unlikely to change'

It all sounds so wonderfully simple. All Israel has to do is to get out of the West Bank, Gaza Strip and Syrian Golan Heights and recognise a Palestinian state. The Arab world would not only grudgingly recognise its existence. It would positively embrace it by opening embassies, and trading away happily with the once-hated state. The wars would at last be over. Israel's F-16s would gather cobwebs in their hangers; the Kalashnikovs and grenades would be stashed away.

It all sounds so wonderfully simple. All Israel has to do is to get out of the West Bank, Gaza Strip and Syrian Golan Heights and recognise a Palestinian state. The Arab world would not only grudgingly recognise its existence. It would positively embrace it by opening embassies, and trading away happily with the once-hated state. The wars would at last be over. Israel's F-16s would gather cobwebs in their hangers; the Kalashnikovs and grenades would be stashed away.

This, in essence, is the nub of a "plan" – although this is too concrete a word for it – which Saudi Arabia's Crown Prince and de facto ruler, Abdullah bin Abdulaziz al-Saud, kept hidden in his desk drawer for months before revealing its contents to The New York Times.

Heartily sick of the Middle East's endless conflict, the world is excited and intrigued, though also baffled. Can it really be that easy, after all the wasted years of the Oslo negotiations, with its endless betrayals and loss of trust? Would this simple formula end, in a stroke, the relentless building by Israel on Arab land, and the ceaseless killing? Western diplomats, commendably eager to clutch at almost anything in these desperate times, hope that at least something will come of it. The indefatigable Javier Solana, the EU's foreign policy chief, raced off yesterday to the desert kingdom to find out more from the Saudis at first hand.

The White House has reacted positively, although guardedly, mindful of the domestic political perils of aligning itself too eagerly with Arab initiatives. Liberal-leaning Israelis are sounding keen. And the Palestinians are positively delighted. But mirages dot the barren landscape of Middle East peace-making. The Saudi proposal – which is expected to go before the Arab League summit next month – is not insignificant. But it is a very long shot.

Crown Prince Abdullah's policy adviser, Adel al-Jubeir, prefers the word "vision" to "plan". He points out that negotiating with Israel is principally a task for the main players – Israel, the Palestinians, Syria and Lebanon. The Saudis are simply guiding the way.

From what is known of it so far, the vision is blurred. It does not offer a clear solution to the core issues that have frustrated peacemaking efforts in the past, such as the fate of Jerusalem's holy sites – a matter about which Saudi Arabia, as the guardian of Islamic shrines, feels strongly – or the return of Palestinian refugees to Israel. Nor is there any escaping the yawning gap between its basic proposition – full withdrawal from the occupied territories, now inhabited by 360,000 Israeli settlers – and Israel's position on the border question.

Ariel Sharon, the Israeli Prime Minister, has approached the proposals warily, eager to avoid damaging his standing with the Americans by dismissing it outright. He has politely expressed interest, and a desire to know more. But it is impossible to imagine that he would contemplate accepting a withdrawal to the lines of 4 June 1967, as Prince Abdullah suggests, or anything close to it.

The prospect of having normal relations with the Arab world – after 54 years of enmity or, at best, cold peace – is alluring to Israelis. But there is no reason to believe this prize is large enough to persuade Mr Sharon to change his view that possession of large parts of the West Bank is crucial to his nation's security and an historic right of the Jewish people. This has been the former general's lifelong mantra; only the most wild-eyed optimist would argue that he is about to change.

Mr Sharon, however, will not be in power forever. There is a feeling that the ground is slipping beneath his feet, as war-weary Israelis increasingly criticise him for failing to fulfil his election promise of peace and security. Other more moderate leaders, notably Labour's Shimon Peres and Benjamin Ben-Eliezer, have been more openly enthusiastic about the prince's proposals, and would be likely to be more flexible over the border issue.

Behind them stand several influential Israeli newspapers – notably, Ha'aretz and the mass-selling Ma'ariv – which have called on Mr Sharon to embrace the Saudi plan. And yet their opinions have yet to convince the Israeli public. A poll published at the weekend by Yedioth Ahronoth newspaper found that six out of 10 opposed the Saudi plan.

Israel is only part of the problem. In 2000, during the dying days of the peace negotiations mediated by President Bill Clinton, the Palestinian leadership made it clear that it would contemplate compromising over the 1967 borders. The Syrians did not. Earlier that year, Hafez al-Assad throttled an attempt by Mr Clinton to broker a deal by insisting on the return of a narrow band of land along the shores of the Sea of Galilee. In the Arab world, his refusal to budge from UN Security Council Resolution 242 became part of his posthumous legend, and the legacy of his son and heir to the presidency, Bashar al-Assad.

To this should be added the fact that Syria is unlikely to embrace a deal that does not address the question of the 280,000 Palestinian refugees living in its puppet neighbouring state, Lebanon. And Saddam Hussein, with his denunciations of Zionism, does not look much like a man who is about to lead Iraqis into a happy trading partnership with businesses in Tel Aviv.

Western diplomats trying to jostle the peace process into life hope Saudi Arabia will overcome the die-hards through its sheer power and influence in the Arab world. It will not be easy. The Arab radicals fighting Israel will suspect that the underlying reason for the Crown Prince's proposal was Saudi Arabia's desire to mend relations with its US allies, which have been strained since the discovery that the kingdom was a seed-bed for militant Islamic terror organisations. Fifteen Saudis were involved in the 11 September atrocities.

None of this means that the documents, still lurking in the depths of Prince Abdullah's desk drawer, are of no use at all. The mere existence of a new idea has revitalised the peace-makers, providing them with new pressure points. The plan could also prove significant in the long term.

For nearly a year, the great bulk of the Israeli public has stood firmly behind Mr Sharon's efforts to quash the Palestinian uprising. The Israeli Prime Minister relied on military force and economic deprivations, tactics that were wildly excessive to those who watched from the ground level. Israelis are increasingly beginning to realise that this strategy has not only failed, but – in the view of the slowly awakening left and peace camp – was immoral and corrupting of society.

Prince Abdullah is working to exploit this change in Israel's political climate. He has said that his plan was meant as a signal to Israelis – as opposed to their leadership – that there can be peace. It is almost certainly a vision that could only ever be realised in the absence of Mr Sharon.