Freezing construction of new settlements is the critical step called for in this spring's Mitchell Report on Mideast violence -- a reasonable, even-handed document that assigned blame to both Israel and the Palestinians and was completely ignored by all parties, most glaringly the only one that had the power to make it happen, the United States.

Israel's construction of settlements in the occupied territories taken in the 1967 war violates international law, including the Fourth Geneva Convention, which, in the language of the Mitchell report, "prohibits Israel (as an occupying power) from establishing settlements in occupied territory pending an end to the conflict." U.S. administrations from Reagan to the present have opposed the settlements. Their existence is the first point brought up by Palestinians in conversations about Israel.

It is true, as the Mitchell Report acknowledges, that the Palestinians bear their share of the blame for continuing to launch attacks against Israel. But playing the blame game at this point is a sterile exercise, and the stakes are Israeli and Palestinian lives. To break the cycle of violence a bold step must be taken. A freeze -- or, better still, a freeze combined with a dismantling of existing settlements -- would be the single most positive step Israel could take toward restoring trust between itself and the Palestinians. As an editorial in the Israeli newspaper Haaretz said, "A government which seeks to argue that its goal is to reach a solution to the conflict with the Palestinians through peaceful means, and is trying at this stage to bring an end to the violence and terrorism, must announce an end to construction in the settlements."

There should be no illusions that this by itself would bring peace. Although most Israelis agree that no new settlements should be built, months of bloody terror have eroded their trust in the Palestinians. And they are led by Ariel Sharon, a hard-liner who knows no response to terror but counter-terror. Sharon has refused to stop building the settlements, saying he does not want to reward Palestinian violence and citing security concerns. But until the Palestinians are given genuine hope, there will be no security for Israel.

Faced with this stalemate, the Bush administration has done nothing -- not only on the settlement issue, but on anything relating to the Middle East. Fearing it will humiliatingly fail as the Clinton administration failed before it, it skulks haplessly on the sidelines. The mightiest country in the world is reduced to mumbling earnestly, "The cycle of violence must stop," as bombs keep exploding and people keep dying.

It's time for America to start throwing its weight around -- not just with the Islamic states like Pakistan that offer second-hand harbor to terrorists, but with Israel. There should be no great difficulty in getting the Israelis to do what we want: Just tell them that if they don't, we won't give them any more money. It's remarkable how persuasive $3 billion a year can be, the total amount of military and civilian aid we lavish on our Mideast partner.

At the same time as we lean on the Israelis, we also must squeeze Arafat. The Palestinian leader and those who follow him must be told that further outbreaks of violence will abrogate the whole deal. And he must also be told that at the end of the day (and it's going to be a very short day) the Palestinian people are not going to get significantly more than what they almost got at Camp David -- that tragic missed opportunity for whose failure, as incisive articles in the New York Times and the Aug. 9 New York Review of Books have demonstrated, Arafat, Barak, and Clinton must all shoulder the blame.

The U.S. must give the Palestinians muscular assurance that their basic needs as a sovereign state will be met. Those needs are summed up by Rob Malley and Hussein Agha in the New York Review of Books: "a viable, contiguous Palestinian state on the West Bank and Gaza with Arab East Jerusalem as its capital and sovereignty over its Muslim and Christian holy sites; meaningful sovereignty; and a just settlement of the refugee issue."

But just as the Israelis must give something up, so too must the Palestinians. There is no other realistic path to peace. They will not get everything they want. They must be told that they will not get universal right of return for all those Palestinians who were displaced by the creation of the state of Israel, or control of all of the West Bank or Jerusalem.

Arafat is a gravely flawed leader, torn between realism and maximalist mythology. After he failed to embrace the imperfect but viable solution offered by Barak and Clinton at Camp David, even many liberal Israelis concluded that he was not seriously interested in making peace. But he is a better partner than anyone else on the horizon. And a bold American move at this crucial moment -- with Arab leaders realizing that after Tuesday, the rules of the game have changed forever -- could shake Arafat, and the moderate frontline Arab states, out of their anti-American posturing and into constructive action. Neither the PLO nor any Arab state wants a future in which a deadlocked Israeli-Palestinian conflict breeds endless terrorism, which in turn unleashes the full might of American military force against the Arab world.

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