Much of the nail-biting suspense hinges on whether Barak will pull through the political storm that has rocked his government since he headed for peace talks at Camp David. Barak, who barely survived a no-confidence vote last week, has three short months of parliamentary recess to assemble a new coalition and strike a deal with the Palestinians.

Talking to his dispirited party troops, who now represent a minority in the Knesset, the Israeli Parliament, Barak tried to inject a note of heroism in the daunting weeks ahead: "We are climbing a steep hill. Whoever can't do it should step aside."

Many have already chosen to step aside and leave the commando mission to Barak, Israel's most-decorated soldier. Foreign Minister David Levy, known for his keen sense of where the wind is blowing, resigned Aug. 2, joining 13 of the 22 Cabinet members who have deserted Barak so far.

Levy's exit followed Peres' humiliating defeat. The Knesset turned down Peres, a veteran politician and passionate advocate of regional peace, and chose instead Moshe Katsav, an amiable but lightweight opposition member -- in large part because Peres was Barak's man in the race. "Any other candidate backed by Barak would have lost," commented Gideon Levy, a columnist with the Israeli daily Ha'aretz.

If Barak is to save his own neck now, most observers think he will have to extract a last-minute agreement from Arafat. Barak, who was elected in a landslide last year on a pro-peace platform, would then submit a peace deal to the Israeli public and bypass the opposition of the unruly, splintered Knesset by calling for new elections.

"If Barak comes up with a deal, people will have no choice but to vote in favor of peace," said Zeev Chafets, an Israeli columnist for the Jerusalem Report. "Barak would handily get reelected," he said. The right-wing hawkish parties in the Knesset may have a 10-seat advantage on the doves. And an armed group of hardcore settlers may be ready to ignite a civil war rather than give up their homes in the occupied territories. But an overwhelming majority of Israelis support finding a diplomatic solution to the long-standing Palestinian-Israeli conflict.

The likelihood that Arafat will abandon his intransigent stance in the next few weeks, however, is none too high. The final step towards lasting peace seems tragically impossible to make given Barak's political weakness and Arafat's unwillingness to compromise on key issues, such as Palestinian sovereignty over East Jerusalem and the right of refugees to return to their homeland.

Since the failure of the Camp David summit, diplomats -- some of whom have invested years of cajoling and creative thinking into bringing Israeli and Palestinian positions closer -- paint a gloomy picture of the road ahead. The interim agreement that has been governing the relations between Israel and the Palestinians will expire on Sept. 13. After that, "things may become very chaotic," warned Khatib.

But the future may not necessarily be so bleak.

First, diplomatic failure does not inevitably spell the end for Barak. If he abandons the idea of reaching a new agreement with the Palestinians, he will be free to invite members of the hawkish opposition into his government. Then he would no longer have to rely on the debilitating and capricious support of ultra-Orthodox religious parties. That's just what some of Barak's overwhelmingly secular constituency is looking forward to: a secular left-right unity government that will address domestic issues neglected during Barak's first year in power.

Second, Israel's international standing is not likely to suffer too much from a lack of diplomatic progress over the next few weeks. At Camp David, Barak already boosted Israel's image by winning an "A" for effort from Clinton. Clinton's announcement on Israeli television two weeks ago that he is considering moving the U.S. Embassy to West Jerusalem -- thereby recognizing for the first time the city as Israel's legitimate capital -- was greeted with cheers by Israelis, who see it as a precious diplomatic gain. (A Western diplomat argued in private that the announcement was in fact "Clinton's last gift to his wife, Hillary," since Hillary Clinton is actively courting the Jewish vote in the New York Senate race.)

So if the Palestinians resort to violence, the international credit Barak earned at Camp David for trying to reach a deal could come in handy. "He tested the other side and will have proven to all but the most fanatic left-wingers that there's no deal. He will be the guy who tried to get a deal but couldn't," said Klein-Halevy. "If there's a war [against Palestinians], it's good for parents to know that their kids are fighting in a war that the other side is responsible for," he said.

During the intifada, the Palestinian uprising that raged between 1987 and 1993, the images of Israeli soldiers firing live ammunition at Palestinian stone throwers won Palestinians the sympathy of television viewers in Israel and abroad. The demoralizing carnage convinced many Israelis that it was time to end the occupation -- and helped put the pro-peace Rabin government in power.

"But this time around, almost nothing will move me to sympathize with Palestinians," warned Klein-Halevi. "They've had their chance too often. Barak committed political suicide for them but Arafat stayed with his arms folded and said: 'It's not good enough, you're not on your knees yet.'"

The situation on the ground has also changed in Israel's favor since the early 1990s. During the intifada, Israeli troops were positioned in the center of Palestinian towns, within easy reach of stone throwers and Molotov-cocktail launchers. Today, in contrast, there are very few points of contact between Israelis and Palestinians (mainly at checkpoints between Palestinian-run and Israeli areas). At the same time, Arafat has armed a dozen militias since he became president of the Palestinian Authority. In riots earlier this year, those militias showed their willingness to use their rifles against Israeli police. Palestinian gunmen make much less photogenic underdogs than do teenagers with slingshots.

Ironically, by refusing peace offerings at Camp David, Arafat might be better able to prevent war. Some analysts refuse to believe that Palestinian violence is currently a real threat. Calculated tension, mass demonstrations -- perhaps. But Arafat is thought to be strong enough to contain any serious conflagration. By standing firm at Camp David, "Arafat has reconstructed his legitimacy and is in full control of the streets," said Mahdi Abdul Hadi, a political analyst at PASSIA, a Palestinian think tank.

As their leaders face a looming deadline, the people's experience points to the realities of the road to peace. For 20 years, residents of the Oasis of Peace, a mixed community near Jerusalem where Arab and Jewish families live together, have been facing these enormous issues inside a microcosm. There, Arab and Jewish children learn to play and cooperate in the shade of bougainvillea trees. The villagers are some of the most optimistic peaceniks on either side. But their lives show just how difficult achieving harmonious coexistence can be.

Despite an abundance of goodwill, the Arab families living there feel inferior to the Jewish villagers. Even in the village's bilingual school, Hebrew dominates Arabic. And even in the village's Utopian confines, Arabs cannot agree on how friendly and accommodating toward Jews they should be.

Abdessalam Najjar, a 48-year-old congenial Arab Israeli, was idealistic enough to move to the Oasis of Peace 20 years ago. But these days Najjar puts little stock in the words of political doves. Israelis "want a peace treaty with continued occupation of Jerusalem, with a continuation of settlements and with the continuation of Israel's domination over the Palestinians," said Najjar. "Everybody wants 'peace' when it means nothing."

Given his experience in the village, Najjar thinks it is foolish to expect a final settlement of the decades-long conflict between Palestinians and Israelis. "You need a commitment on both sides in favor of step-by-step reconciliation instead of thinking in terms of all or nothing," he said.

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